Exhibit 1 to Form 8-A
RIGHTS AGREEMENT
A. P. GREEN INDUSTRIES, INC.
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
Rights Agent
Dated as of November 13, 1997
INDEX
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Page
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Section 1. Certain Definitions..............................................1
Section 2. Appointment of Rights Agent......................................4
Section 3. Issue of Right Certificates......................................4
Section 4. Form of Right Certificates.......................................5
Section 5. Countersignature and Registration................................6
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.....................................................6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....7
Section 8. Cancellation and Destruction of Right Certificates...............8
Section 9. Reservation and Availability of Shares of Preferred Stock........8
Section 10. Preferred Stock Record Date.....................................9
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights.......................................................9
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....15
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..................................................15
Section 14. Fractional Rights and Fractional Shares........................17
Section 15. Rights of Action...............................................18
Section 16. Agreement of Right Holders.....................................18
Section 17. Right Certificate Holder Not Deemed a Stockholder..............18
Section 18. Concerning the Rights Agent....................................19
Section 19. Merger or Consolidation or Change of Name of Rights Agent......19
Section 20. Duties of Rights Agent.........................................20
Section 21. Change of Rights Agent.........................................22
Section 22. Issuance of New Right Certificates.............................22
Section 23. Redemption and Termination.....................................22
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Section 24. Exchange.......................................................23
Section 25. Notice of Proposed Actions.....................................24
Section 26. Notices........................................................25
Section 27. Supplements and Amendments.....................................25
Section 28. Successors.....................................................26
Section 29. Benefits of this Agreement.....................................26
Section 30. Severability...................................................26
Section 31. Governing Law..................................................26
Section 32. Counterparts...................................................26
Section 33. Descriptive Headings...........................................26
EXHIBIT A - Form of Certificate of Designation.............................A-1
EXHIBIT B - Form of Right Certificate.....................................B-1
EXHIBIT C - Form of Summary of Preferred Stock Purchase Rights.............C-1
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RIGHTS AGREEMENT
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This Agreement, dated as of November 13, 1997, is entered into
between A. P. GREEN INDUSTRIES, INC., a Delaware corporation (the "Company"),
and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK (the "Rights Agent").
W I T N E S S E T H
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WHEREAS, on November 13, 1997, the Board of Directors of the
Company authorized and declared a dividend distribution of one right
(hereinafter referred to as a "Right") for each share of Common Stock, $1.00 par
value, of the Company outstanding at the close of business on January 7, 1998
(the "Record Date") (other than shares of such Common Stock held in the
Company's treasury on such date) and has authorized the issuance of one Right in
respect of each share of Common Stock of the Company issued between the Record
Date (whether originally issued or issued from the Company's treasury) and the
Distribution Date (as such term is defined in Section 3 hereof), each Right
representing the right to purchase one one-hundredth of a share of Series B
Junior Participating Preferred Stock of the Company having the rights, powers
and preferences set forth in the form of Certificate of Designation attached
hereto as Exhibit A, upon the terms and subject to the conditions hereinafter
set forth (the "Rights");
WHEREAS, the Company desires to appoint the Rights Agent to
act as provided herein, and the Rights Agent is willing to so act;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions.
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For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates (as hereinafter defined) and
Associates (as hereinafter defined) of such Person, without the prior written
approval of a majority of the Board of Directors, shall be the Beneficial Owner
(as hereinafter defined) of securities of the Company constituting 20% or more
of the Voting Power (as hereinafter defined) of the Company or was such a
Beneficial Owner at any time after the date hereof, whether or not such Person
continues to be the Beneficial Owner of securities representing 20% or more of
the Voting Power of the Company, but shall not include the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, any entity holding securities of the Company to the
extent organized, appointed or established by the Company or any Subsidiary of
the Company for or pursuant to the terms of any such employee benefit plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of (i) an acquisition of Common Stock by means of shares issued
directly by the Company which increases the proportionate Voting Power of such
securities beneficially owned by such Person to 20% or more of the Voting Power,
where such acquisition is approved by a majority of the Continuing Directors (as
hereinafter defined); provided, however, that such Person was not an Acquiring
Person prior to such acquisition of shares from the Company; (ii) an acquisition
of voting securities of the Company by the Company which, by reducing the amount
of such securities outstanding, increases the proportionate Voting Power of such
securities beneficially owned by such Person to 20% or more of the Voting Power;
provided, however, that if a Person becomes the Beneficial Owner of securities
constituting 20% or more of the Voting Power by reason of purchases by the
Company and shall, after such purchases by the Company, become the Beneficial
Owner of any additional voting securities of the Company (other than
pursuant to a stock dividend, stock split, capitalization or similar transaction
that does not affect the percentage of voting securities beneficially owned by
such person), then such Person shall be deemed to be an Acquiring Person.
Notwithstanding the foregoing, if a majority of the Continuing Directors then in
office determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to this Section 1(a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of voting securities of the Company so that such Person would
no longer be an Acquiring Person, then such Person shall not be deemed to be an
"Acquiring Person" for purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule l2b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date hereof.
(c) A person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise, provided, however, that a Person shall not be deemed the "Beneficial
Owner" of securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for payment or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or understanding, provided,
however, that a Person shall not be deemed the "Beneficial Owner" of any
security under this clause (B) if the agreement, arrangement or understanding to
vote such securities (1) arises solely from a revocable proxy or consent given
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable by such person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy or
consent as described in clause (B) of subparagraph (ii) of this paragraph (c))
or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the States of Delaware,
Missouri or Illinois are authorized or obligated by law or executive order to
close.
(e) "Close of Business" on any given date shall mean 5:00
P.M., Central time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Central time, on the next succeeding
Business Day.
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(f) "Common Stock" shall mean the Common Stock, $1.00 par
value, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock with the greatest
Voting Power of such Person or the equity securities or other equity interest
having power to control or direct the management of such Person or, if such
Person is a Subsidiary (as hereinafter defined) of another Person, of the Person
which ultimately controls such firs mentioned Person and which has issued and
outstanding such capital stock, equity securities or equity interests.
(g) "Continuing Director" shall mean (i) any member of the
Board of Directors of the Company, while such person is a member of the Board,
who is not an Acquiring Person or an Affiliate or Associate of an Acquiring
Person, or a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate, and was a member of the Board of Directors prior to the
Stock Acquisition Date, and (ii) any successor of a Continuing Director, while
such successor is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person or of any such Affiliate or
Associate and is recommended or elected to succeed the Continuing Director by a
majority of the Continuing Directors.
(h) "Distribution Date" shall have the meaning defined in
Section 3 hereof.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(j) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity, and shall include any
successor (by merger or otherwise) of any such entity.
(k) "Preferred Stock" shall mean the Series B Junior
Participating Preferred Stock, $1.00 par value, of the Company.
(l) "Purchase Price" shall have the meaning defined in Section
4 hereof.
(m) "Stock Acquisition Date" shall mean the earlier of (i) the
first date of public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such, or (ii) the date on which the Company first
has notice, direct or indirect, or otherwise determines that a Person has become
an Acquiring Person.
(n) "Subsidiary" shall mean any corporation or other entity of
which the securities or other ownership interests having ordinary Voting Power,
in the absence of contingencies, to elect a majority of the board of directors
or other persons performing similar functions are at the time directly or
indirectly owned by another corporation or other entity and shall include
Subsidiaries of Subsidiaries, except that "Subsidiary" when used with reference
to the Company shall mean any corporation or other entity of which either a
majority of the Voting Power of the voting equity securities or a majority of
the equity interests is owned, directly or indirectly, by the Company.
(o) "Voting Power" shall mean the Voting Power of all
securities of a Person then outstanding generally entitled to vote for the
election of directors of the Person (or, where appropriate, for the election of
persons performing similar functions).
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Section 2. Appointment of Rights Agent.
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The Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in accordance with Section 3
hereof shall prior to the Distribution Date also be the holders of the Common
Stock) in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. In the event the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights Agent
and any Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates.
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(a) Until the earlier of (i) the Close of Business on the
tenth day after the Stock Acquisition Date or (ii) the Close of Business on the
tenth day (or such later date as may be determined by action of a majority of
the Continuing Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement of, or first public announcement of
the intent of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company, or
any entity holding securities of the Company to the extent organized, appointed
or established by the Company or any Subsidiary of the Company for or pursuant
to the terms of any such employee benefit plan) to commence (which intention to
commence remains in effect for five Business Days after such announcement),
without the prior written approval of a majority of the Continuing Directors, a
tender or exchange offer which would result in any Person becoming the
Beneficial Owner of securities representing 20% or more of the Voting Power of
the Company (including any such date which is after the date of this Agreement
and prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"): (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
Right Certificates) and not by separate Right Certificates, as more fully set
forth below, and (y) the Rights (and the right to receive certificates therefor)
will be transferable only in connection with the transfer of the underlying
shares of Common Stock, as more fully set forth below. As soon as practicable
after the Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Company shall prepare and execute, and the Rights Agent
shall countersign and send, at the expense of the Company, by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock as of
the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a right certificate, in substantially the
form of Exhibit B hereto (the "Right Certificate"), evidencing one Right for
each share of Common Stock so held. As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class postage prepaid mail, to each record holder of the Common Stock as
of the Close of Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date until the Distribution Date (or the earlier
redemption, exchange, expiration or termination of the Rights), the Rights will
be evidenced by such certificates for the Common Stock registered in the names
of the holders of the Common Stock and the registered holders of the Common
Stock shall also be registered holders of the associated Rights. Until the
Distribution Date (or the earlier redemption, exchange, expiration or
termination of the Rights), the surrender for transfer of any of the
certificates for the Common Stock outstanding in respect of which Rights have
been issued (with or without a copy of the
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Summary of Rights attached thereto) shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.
(c) Certificates for the Common Stock issued after the Record
Date but prior to the earlier of the Distribution Date or the redemption,
expiration or termination of the Rights shall be deemed also to be certificates
for Rights and shall have impressed, printed or written on, or otherwise affixed
to them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a Rights
Agreement between A.P. Green Industries, Inc. and the Rights
Agent, the terms of which are incorporated herein by reference
and a copy of which is on file at the principal executive
offices of A.P. Green Industries, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. A.P. Green Industries,
Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge promptly following receipt of a
written request therefor. Under certain circumstances, Rights
beneficially owned by Acquiring Persons (as defined in the
Rights Agreement) and any subsequent holder of such Rights, may
become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date (or the earlier redemption, exchange,
expiration or termination of the Rights), the Rights associated with the Common
Stock represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.
In the event that the Company purchases or acquires any Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
Common Stock which are no longer outstanding. Upon reissuance of such Common
Stock by the Company prior to the Distribution Date (or earlier redemption,
exchange, expiration or termination of the Rights), the Rights shall again
attach to such Common Stock as set forth in this Section 3(c).
Section 4. Form of Right Certificates.
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(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall be
in substantially the same form as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
customary usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Right Certificates, whenever issued, shall be dated as of the Record Date,
and on their face shall entitle the holders thereof to purchase such number of
one one-hundredths of a share of Preferred Stock as shall be set forth therein
at the price per one one-hundredth of a share as set forth therein (the
"Purchase Price"), but the number of such shares and the Purchase Price shall be
and remain subject to adjustment as provided in Sections 11 and 13 hereof.
(b) Any Right Certificate issued pursuant to Section 3(a)
hereof that represents Rights as to which an Acquiring Person or any Associate
or Affiliate thereof is the Beneficial Owner and
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any Right Certificate issued at any time upon the transfer of any Rights to an
Acquiring Person or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate, and any Right Certificate issued
pursuant to Section 6 hereof, Section 11 hereof or Section 22 hereof upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right Certificate
were issued to a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person. This Right
Certificate and the Rights represented hereby may become void
in the circumstances specified in Section 7(e) of the Rights
Agreement.
The failure to print the foregoing legend on any such Right Certificate or any
defect therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
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(a) The Right Certificates shall be executed on behalf of the
Company by its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent or any registrar for the
Common Stock (the "Registrar") and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company whose manual or facsimile
signature is affixed to the Right Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent or the Registrar and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent or the Registrar, issued and delivered with
the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company. Any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates, the certificate number of each of
the Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
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Right Certificates; Mutilated, Destroyed, Lost
--------------------------------------------------
or Stolen Right Certificates.
----------------------------
Subject to the provisions of Section 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date (as such term is defined in Section
7(a) hereof), any Right Certificate or Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section 7(e)
hereof) may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of shares of Preferred Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal office of the Rights Agent.
Thereupon, the Rights Agent or the Registrar shall countersign and deliver to
the Person entitled thereto
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a Right 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 transfer, split
up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to the Company and the Rights Agent, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent or the Registrar for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
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of Rights.
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(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal office of the Rights
Agent together with payment of the Purchase Price for each one one-hundredth of
a share of Preferred Stock as to which the Rights are exercised, at or prior to
the Close of Business on the earlier of (i) January 6, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, or (iii) the time at which the Rights are exchanged as
provided in Section 24 hereof (such earlier date being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be
$45.00, subject to adjustment from time to time as provided in Sections 11 and
13 hereof, and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate, with the form of
election to purchase duly executed, accompanied by payment of the Purchase Price
for each one one-hundredth of a share of Preferred Stock to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
the Rights pursuant hereto in accordance with Section 9 hereof in cash, or by
certified check or money order payable to the order of the Company, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) either (A)
requisition from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent), certificates for the
number of shares of Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, or
(B) if the Company, in its sole discretion, shall have elected to deposit the
shares of Preferred Stock issuable upon exercise of the Rights hereunder into a
depositary, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of Preferred Stock as
are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby irrevocably authorizes the
depositary agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) promptly after
receipt of such certificates or depositary receipts cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder,
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and (iv) when appropriate, after receipt, promptly deliver such cash in lieu of
issuance of fractional shares to or upon the order of the registered holder of
such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all of the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, upon the occurrence of any of the events listed in Section 11(b) or in
Section 13(a) hereof, any Rights of which an Acquiring Person or any Associate
or Affiliate of the Acquiring Person was the Beneficial Owner at any time on or
after the earlier of the Stock Acquisition Date or the Distribution Date shall
become void with respect to the rights provided under Section 11(b) and Section
13(a) hereof and any holder of such Rights shall thereafter have no right to
exercise such rights under the provisions of Section 11(b) and Section 13(a).
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless the certification
contained in the appropriate form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise shall have
been properly completed and duly executed by the registered holder thereof and
the Company shall have been provided with such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of such Rights or
Affiliates or Associates of such Beneficial Owner (or former Beneficial Owner)
as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
--------------------------------------------------
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent in
cancelled form, or, if surrendered to the Rights Agent in uncancelled form,
shall be cancelled by the Rights Agent, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any of the provisions of
this Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of
-----------------------------------------
Preferred Stock.
---------------
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or its authorized and issued shares of Preferred Stock held in
treasury, the number of shares of Preferred Stock that will be sufficient to
permit the exercise in full of all outstanding Rights and, after the occurrence
of an event specified in Section 11(b) hereof, shall so reserve and keep
available a sufficient number of shares of Preferred Stock, Common Stock and/or
other securities which may be required to permit the exercise in full of the
Rights pursuant to this Agreement.
(b) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
and/or other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares or other securities (subject to
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payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares or securities.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the first occurrence of an event which (with the
passage of the prescribed time periods set forth in Section 3(a) hereof) would
establish the Distribution Date, a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the date of the expiration of the Rights. The Company will also take such
action as may be appropriate under the Blue Sky laws of the various states.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock and/or other securities upon
the exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates or the issuance or delivery of
certificates or depositary receipts for Preferred Stock and/or other securities
in a name other than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, nor shall the Company be required to
issue or deliver any certificates or depositary receipts for shares of Preferred
Stock and/or other securities upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until the Company has established to
its satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date.
----------------------------
Each Person (other than the Company) in whose name any
certificate for shares of Preferred Stock (or other securities) is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Stock (or other securities) represented
thereby on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or other securities) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the Preferred Stock (or other securities) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder as a
Right Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
-------------------------------------------------
Number of Rights.
-----------------
The Purchase Price, the number of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) In the event the Company shall at any time after the date
of this Agreement (ii) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (ii) subdivide the outstanding Preferred Stock, (iii)
combine the outstanding Preferred Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the
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continuing or surviving corporation), except as otherwise provided in this
Section 11, the Purchase Price in effect at the time of the record date for such
dividend or the time of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock, including
Preferred Stock, issuable upon exercise of a Right, shall be proportionately
adjusted so that the holder of any Right exercised after such time, upon payment
of the aggregate Purchase Price such holder would have to pay to exercise such
Right prior to such time, shall be entitled to receive the aggregate number and
kind of shares of capital stock, including Preferred Stock, which, if such Right
had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.
(b) In the event any Person shall become an Acquiring Person,
then proper provision shall be made so that each holder of a Right, subject to
Section 7(e) and except as provided below, shall after the later of the
occurrence of such event and the effective date of an appropriate registration
statement pursuant to Section 9 hereof, have a right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of shares of Preferred Stock, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-hundredths of a share of
Preferred Stock for which a Right is then exercisable and dividing that product
by (y) 50% of the Current Market Price per one share of Common Stock (determined
pursuant to Section 11(f) hereof on the date of the occurrence of any one of the
events listed above in this subparagraph (b)) (such number of shares being
referred to as the "Number of Adjustment Shares").
(c) In the event that there shall not be sufficient shares in
treasury or authorized but unissued shares of Common Stock to permit the
exercise in full of the Rights in accordance with the foregoing Section 11(b)
and the Rights become so exercisable, notwithstanding any other provision of
this Agreement, to the extent necessary and permitted by applicable law and any
agreements in effect on the date hereof to which the Company is a party, each
Right shall thereafter represent the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
a number of shares, or unit of shares, of (x) Common Stock, and (y) any class or
series of preferred stock (or other equity securities) of the Company,
including, but not limited to Preferred Stock, equal in the aggregate to the
Number of Adjustment Shares where the Board of Directors shall have in good
faith deemed such shares or units, other than the shares of Common Stock, to
have at least the same value and voting rights as the Common Stock (a "Common
Stock Equivalent"); provided however, if there are unavailable sufficient shares
(or fractions of shares) of Common Stock and/or Common Stock Equivalents, then
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock or Common Stock Equivalents for issuance upon
exercise of the Rights, including the calling of a meeting of stockholders; and
provided, further, that if the Company is unable to cause sufficient shares of
Common Stock and/or Common Stock Equivalents to be available for issuance upon
exercise in full of the Rights, then the Company, to the extent necessary and
permitted by applicable law, and any agreements or instruments in effect on the
date thereof to which it is a party, shall make provision to pay an amount in
cash equal to twice the Purchase Price (as adjusted pursuant to this Section
11), in lieu of issuing shares of Common Stock and/or Common Stock Equivalents.
To the extent that the Company determines that some action needs to be taken
pursuant to this Section 11(c), a majority of the Board of Directors may suspend
the exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 11(b) hereof shall have
occurred, in order to decide the appropriate form of distribution to be made
pursuant to this Section 11(c) and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended. The Board
of
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Directors may, but shall not be required to, establish procedures to allocate
the right to receive Common Stock and Common Stock Equivalents upon exercise of
the Rights among holders of Rights, which such allocation may be, but is not
required to be, pro rata.
(d) If the Company shall fix a record date for the issuance of
rights or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 90 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or securities having the same or more favorable
rights, privileges and preferences as the Preferred Stock ("Equivalent Preferred
Stock")) or securities convertible into Preferred Stock or Equivalent Preferred
Stock, at a subscription or purchase price per share of Preferred Stock or per
share of Equivalent Preferred Stock or having a conversion price per share, as
the case may be, less than the Current Market Price per share of Preferred Stock
(as defined in Section 11(f) hereof) on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date plus the number of shares of Preferred Stock which the
aggregate subscription or purchase price of the total number of shares of
Preferred Stock or Equivalent Preferred Stock to be offered for subscription or
purchase (and/or the aggregate initial conversion price of the convertible
securities so to be offered for subscription or purchase) would purchase at such
Current Market Price, and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription or purchase price
(and/or the conversion price of convertible securities) may be paid in a
consideration, part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by a majority
of the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(e) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of earnings or retained earnings of
the Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
convertible securities, subscription rights or warrants (excluding those
referred to in Section 11(d) 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 for one share of Preferred Stock (as defined
in Section 11(f) hereof) on such record date less the fair market value (as
determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such convertible securities, subscription rights or warrants applicable to
one share of Preferred Stock, and the denominator of which shall be such Current
Market Price for one share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
-11-
(f) (i) For the purpose of any computation hereunder, the
"Current Market Price" of any security (a "Security" for purposes of this
Section 11(f)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as hereinafter defined) immediately prior to such date; provided, however, that
in the event that the Current Market Price per share of such Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into shares of such Security or (B) any
subdivision, combination or reclassification of such Security, and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "Current Market Price" shall
be appropriately adjusted to reflect the Current Market Price per share
equivalent of such Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
transaction price as reported by the NASDAQ National Market or, if not so
reported, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the NASDAQ Stock Market or such other
system then in use, or, if on any such date the Security is not reported by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker in the Security selected by a majority of the
Board of Directors. If on any such date no market maker is making a market in
the Security, the fair value of such Security on such date as determined in good
faith by a majority of the Board of Directors shall be used. The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day. If the Security is not publicly
held or not so listed or traded, "Current Market Price" shall mean the fair
value as determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent.
(ii) For the purposes of any computation hereunder, the
"Current Market Price" per share (or one one-hundredth of a share) of Preferred
Stock shall be determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(f) (other than the last sentence
thereof). If the Current Market Price per share (or one one-hundredth of a
share) of Preferred Stock cannot be determined in the manner provided above or
if the Preferred Stock is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(f), the "Current Market Price" per
share of Preferred Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the Current Market
Price per share of the Common Stock and the "Current Market Price" per one
one-hundredth of a share of Preferred Stock shall be equal to the Current Market
Price per share of the Common Stock (as appropriately adjusted). If neither the
Common Stock or the Preferred Stock is publicly held or so listed or traded,
"Current Market Price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.
(g) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the
-12-
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11(g) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten- thousandth of a
share, as the case may be. Notwithstanding the first sentence of this Section
11(g), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which mandates
such adjustment or (ii) the Expiration Date.
(h) In the event that at any time, as a result of an
adjustment made pursuant to Section 11(a) or (b) hereof, the holder of any Right
shall be entitled to receive upon exercise of such Right any shares of capital
stock of the Company other than shares of Preferred Stock, thereafter the number
of such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in Section
11(a) through (e) hereof, inclusive, and the provisions of Section 7, 9, 10, 13
and 14 hereof with respect to the shares of Preferred Stock shall apply on like
terms to any such other shares.
(i) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Preferred
Stock or other capital stock of the Company purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment of the
Purchase Price.
(j) Unless the Company shall have exercised its election as
provided in Section 11(k) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Section 11(d) and (e) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to the nearest
ten-thousandth) obtained by (i) multiplying (A) the number of one one-hundredths
of a share of Preferred Stock covered by a Right immediately prior to the
adjustment by (B) 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.
(k) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of shares of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-hundredths
of a share of Preferred Stock for which such Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If the Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(k), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
-13-
prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates 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 Right Certificates
on the record date specified in the public announcement.
(l) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(m) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares of
Common Stock or other securities and below one one-hundredth of the then par
value, if any, of the Preferred Stock, issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of such Preferred Stock, Common Stock or
other securities at such adjusted Purchase Price. If upon any exercise of the
Rights, a holder is to receive a combination of Common Stock and Common Stock
Equivalents, a portion of the consideration paid upon such exercise, equal to at
least the then par value of a share of Common Stock of the Company, shall be
allocated as the payment for each share of Common Stock of the Company so
received.
(n) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder's right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.
(o) 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 Board of Directors shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any Preferred Stock at less than the then Current Market Price, (iii)
issuance wholly for cash of Preferred Stock or securities which by their terms
are convertible into or exchangeable for Preferred Stock, (iv) stock dividends
or (v) issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to the holders of its Preferred Stock,
shall not be taxable to such stockholders.
(p) The Company covenants and agrees that it shall not, at any
time after the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or exchanged pursuant to Section 24
hereof, (i) consolidate with, (ii) merge with or into, or (iii) sell or
transfer, in one or more transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person, if at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
-14-
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(q) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 hereof or
Section 24 hereof, take any action the purpose or effect of which is to diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
Section 12. Certificate of Adjusted Purchase Price or Number
-------------------------------------------------
of Shares.
---------
Whenever an adjustment is made as provided in Sections 11 or
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 each transfer agent
for the Preferred Stock and the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 26 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustments therein contained and shall not be
obligated or responsible for calculating any adjustment nor shall the Rights
Agent be deemed to have knowledge of such adjustment unless and until the Rights
Agent shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
--------------------------------------------
Assets or Earning Power.
-----------------------
(a) In the event that, directly or indirectly, following the
Distribution Date, (x) the Company shall consolidate with, or merge with and
into, any other Person, (y) any Person shall consolidate with or merge with and
into the surviving corporation of such merger and, in connection with such
merger, all or part of the Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property, or
(z) the Company shall sell, or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person other
than to the Company or one or more of its wholly owned Subsidiaries, then, and
in each such case, proper provision shall be made so that (i) each holder of a
Right, subject to Section 7(e), shall thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of Preferred Stock, such number of shares of
freely tradable Common Stock of the Principal Party (as hereinafter defined),
free and clear of liens, rights of call or first refusal, encumbrances or other
adverse claims, as shall be equal to the result obtained by (A) multiplying the
then current Purchase Price by the number of one one-hundredths of a share of
Preferred Stock for which a Right is then exercisable and dividing that product
by (B) 50% of the Current Market Price per share of the Common Stock of such
Principal Party (determined in the manner described in Section 11(f) hereof) on
the date of consummation of such consolidation, merger, sale or transfer; (ii)
the Principal Party shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof, except for the provisions of
Section 11(b), shall apply to such Principal Party; and (iv) such Principal
Party shall take such steps (including, but not limited to, the authorization
and reservation of a sufficient number of shares of its Common Stock to permit
exercise of all outstanding Rights in accordance with this Section 13(a)) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights.
-15-
(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) hereof, the Person that
is the issuer of any securities into which shares of Common Stock of the Company
are converted in such merger or consolidation, and if no securities are so
issued, the Person, including the Company, that is the other party to the merger
or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions; provided, however, that in any
case described in clause (i) or (ii) in this Section 13(b), (x) if the Common
Stock of such Person is not at such time and has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary or Affiliate of another Person,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest market value, and (z) in case such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in (x) and (y) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party were a "Subsidiary" of both
or all of such joint venturers and the Principal Parties in each such chain
shall bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of such
interest.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and each Principal
Party and each other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement on an
appropriate form under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights, will use its best efforts to
cause such registration statement to become effective as soon as practicable
after such filing and will use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under the Blue
Sky laws of such jurisdictions as may be necessary or appropriate; and
(iii) will deliver to holders of the Rights
historical financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for registration
on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
-16-
Section 14. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last transaction price as reported by the NASDAQ National Market,
or, if not so reported, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the NASDAQ Stock Market or such other
system then in use or, if on any such date the Rights are not reported by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker in the Rights selected by a majority of the 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 such date as determined in good faith by
a majority of the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). Fractions of shares of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the shares of Preferred Stock represented by
such depositary receipts. In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Right Certificates at the time
such Right Certificates are exercised as herein provided, an amount in cash
equal to the same fraction of the current market value of one one-hundredth of a
share of Preferred Stock. For purposes of this Section 14(b), the current market
value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(f)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 hereof giving rise to the right to receive Common
Stock, Common Stock Equivalents or other securities (other than Preferred Stock)
upon the exercise of a Right, the Company shall not be required to issue
fractions of shares or units of such Common Stock, Common Stock Equivalents or
other securities upon exercise of the Rights or to distribute certificates which
evidence fractional shares of such Common Stock, Common Stock Equivalents or
other securities. In lieu of fractional shares or units of such Common Stock,
Common Stock Equivalents or other securities, the Company may pay to the
registered
-17-
holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a share or unit of such Common Stock, Common Stock Equivalent or
other securities. For purposes of this Section 14(c), the current market value
shall be determined in the manner set forth in Section 11(f)(i) hereof for the
Trading Day immediately prior to the date of such exercise and, if such Common
Stock, Common Stock Equivalent or other securities are not traded, each such
share or other unit of Common Stock, Common Stock Equivalent or other securities
shall have the value of one one-hundredth of a share of Preferred Stock.
(d) Except as otherwise expressly provided in this Section 14,
the holder of a Right by the acceptance of the Rights expressly waives his right
to receive any fractional Rights or any fractional share upon exercise of
Rights.
Section 15. Rights of Action.
----------------
All rights of action in respect of this Agreement, except for
rights of action given to the Rights Agent under Section 18 hereof, are vested
in the respective registered holders of the Right Certificates (and, prior to
the Distribution Date, the registered holders of Common Stock); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
Common Stock), may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement. Holders of Rights
shall be entitled to recover the reasonable costs and expenses, including
attorneys' fees, incurred by them in any action to enforce the provisions of
this Agreement.
Section 16. Agreement of Right Holders.
----------------------------
Every holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
-------------------------------------------------
No holder, as such, of any Right Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of Preferred
Stock, 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
-18-
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
---------------------------
The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense (including the costs and expenses of enforcing
this right of indemnification), 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. The indemnity provided for herein shall survive the expiration of the
Rights and the termination of this Agreement.
The Rights Agent may conclusively rely upon and shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate for Preferred
Stock, Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons. Notwithstanding
anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of the action.
Section 19. Merger or Consolidation or Change of Name of
------------------------------------------------
Rights Agent.
------------
Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust business or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that
-19-
time any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
----------------------
The Rights Agent undertakes the duties and obligations imposed
by this Agreement (and no implied duties or obligations shall be read into this
Agreement against the Rights Agent) upon the following terms and conditions, by
all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, 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 act or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the President or any Vice President and
by the Chief Financial Officer, the Chief Accounting Officer, Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, and all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Sections 11 and 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice to the Rights Agent of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock, Common Stock or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of Preferred
Stock, Common Stock or other securities will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments
-20-
and assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chief Executive Officer, President any Vice President, the Chief Financial
Officer, the Chief Accounting Officer, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken or omitted 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 Agreement and the date on 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 or suffered to be taken or omitted by
it in good faith during the period beginning on the date on which the Rights
Agent has applied for written instructions from the Company and ending on the
date upon which the Rights Agent receives such instructions or for 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 ten Business Days after the date any officer of the
Company actually receives such application, unless any such officer 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 with respect to
the proposed action or omission and/or specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or have a pecuniary interest in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1, 2 and/or 3
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company. The
Rights Agent shall not be required to take notice or be deemed to have notice of
any fact, event or determination (including, without limitation, any dates or
events defined in this Agreement or the designation of any Person as an
Acquiring Person, Affiliate or
-21-
Associate) under this Agreement unless and until the Rights Agent shall be
specifically notified in writing by the Company of such fact, event or
determination.
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 a 30-days notice in
writing mailed to the Company and to each transfer agent of the Common Stock and
Preferred Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail at the expense of the Company. The Company may
remove the Rights Agent or any successor Rights Agent upon a 30-days notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock and Preferred Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
Rights Agent. If the Company shall fail to make such appointment within a period
of 30 days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a successor Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any
state, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$25,000,000, or (b) an affiliate of a corporation described in clause (a) of
this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed. The predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall mail a written notice
thereof in writing with the predecessor Rights Agent by certified or registered
mail and each transfer agent of the Common Stock and Preferred Stock, and mail a
written notice thereof to the registered holders of the Right Certificates by
first class mail. Failure to give any notice provided for this Section 21, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 22. Issuance of New Right Certificates.
----------------------------------
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by a majority of
the Board of Directors to reflect any adjustment or change in the Purchase Price
and the number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.
Section 23. Redemption and Termination.
--------------------------
(a) (i) A majority of the Board of Directors of the Company
may, at its option, at any time prior to the earlier of (x) the time that any
Person becomes an Acquiring Person or (y) the Final Expiration Date, elect to
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.001 per Right, as appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as
-22-
the "Redemption Price"). The redemption of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board in
its sole discretion may establish.
(ii) In addition, prior to any event described in Section
13(a), a majority of the Continuing Directors may redeem all but not less than
all of the then outstanding Rights at the Redemption Price (A) following the
occurrence of a Stock Acquisition Date either: (x) if each of the following
shall have occurred and remain in effect: (1) a Person who is an Acquiring
Person shall have transferred or otherwise disposed of a number of shares of
voting securities of the Company in a manner satisfactory to the Continuing
Directors such that such Person is thereafter a Beneficial Owner of securities
having less than 20% of the Voting Power of the Company, and (2) there is no
other Person, immediately following the occurrence of the event described in
(1), who is an Acquiring Person; or (y) in connection with any transaction not
involving an Acquiring Person or an Affiliate or Associate of an Acquiring
Person; or (B) following a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the commencement of
such solicitation if any Person who is a participant in such solicitation has
stated (or, if upon the commencement of such solicitation, a majority of the
Board of Directors of the Company has determined in good faith) that such Person
intends to take, or may consider taking, any action which would result in such
Person becoming an Acquiring Person.
(b) In the case of a redemption permitted under Section
23(a)(i), immediately upon the action of a majority of the Board of Directors
electing to redeem the Rights, evidence of which shall be promptly 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. In the case of a
redemption permitted under Section 23(a)(ii), evidence of which shall have been
filed with the Rights Agent, the right to exercise the Rights will terminate and
represent only the right to receive the Redemption Price only after ten (10)
business days following the giving of such notice of such redemption to the
holders of such Rights. The Company shall promptly give public disclosure of any
such redemption; provided, however, that the failure to give, or any defect in,
any such disclosure shall not affect the validity of such redemption. Within 10
days after the action of the Board of Directors or the Continuing Directors, as
the case may be, ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing by first class mail such notice to all such holders at their last
addresses as they appear upon the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
(c) Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time or
in any manner other than that specifically set forth in this Section 23, and
other than in connection with the purchase of shares of Common Stock prior to
the Distribution Date.
Section 24. Exchange.
--------
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof) for
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person
-23-
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common Stock
for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Stock for Common Stock exchangeable for
Rights, at the initial rate of one one-hundredth of a share of Preferred Stock,
as appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to the terms thereof, so that the fraction of a share
of Preferred Stock delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock or of Preferred Stock issued but not outstanding, or authorized but
unissued, to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock or of Preferred Stock for issuance
upon exchange of the Rights.
(e) The Company shall not be required to issue fractional
shares of Common Stock or of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock) or to
distribute certificates which evidence fractional shares of such Common Stock or
of Preferred Stock. In lieu of such fractional shares, the Company shall pay to
the registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash as determined by
Section 14 hereof.
Section 25. Notice of Proposed Actions.
--------------------------
In case the Company shall propose (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular periodic cash dividend out of earnings or retained earnings of the
Company), or (b) to offer to the holders of its Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any other class or any other securities, rights or
options, or (c) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (d) to effect any consolidation or merger into or with, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sales or other transfer), in one or more
-24-
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, or (e) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall mail by first class mail to each holder of a Right, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, 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 Preferred Stock, if
any such date is to be fixed. Such notice shall be so given in the case of any
action covered by clauses (a) or (b) above at least ten days prior to the record
date for determining holders of the Preferred Stock for purposes of such action,
and in the case of any such other action, at least ten days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of Preferred Stock, whichever shall be the earlier. The failure to give
notice required by this Section 25, or any defect therein, shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
In case any of the events set forth in Section 11(b) of this
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter mail by first class mail to each holder of a Right
Certificate, in accordance with Section 26 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(b) hereof.
Section 26. Notices.
-------
Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (unless another address is filed in writing with the Rights
Agent) as follows:
A. P. GREEN INDUSTRIES, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and Chief Executive Officer
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by registered or certified mail or overnight courier with
a reputable national courier service and shall be deemed given upon receipt and
addressed (unless another address is filed in writing with the Company) as
follows:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company or the Rights Agent.
Section 27. Supplements and Amendments.
--------------------------
The Company may from time to time supplement or amend this
Agreement without the approval of any holders of Right Certificates in order
-25-
to cure any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company may deem necessary or desirable and which shall be consistent
with, and for the purpose of fulfilling, the objectives of the Board of
Directors in adopting this Agreement, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; provided,
however, that from and after such time any Person becomes an Acquiring Person,
this Agreement shall not be amended in any manner which would adversely affect
the interests of the holders of Rights. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement will be effective against
the Rights Agent without the execution of such supplement or amendment by the
Rights Agent.
Section 28. Successors.
----------
All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement.
--------------------------
Nothing in this Agreement shall be construed to give any
Person or corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement. This Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common 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. It is the
intent of the parties hereto to enforce the remainder of the terms, provisions,
covenants and restrictions to the maximum extent permitted by law.
Section 31. Governing Law.
-------------
This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such state applicable to contracts to be made and performed entirely
within such state, except as to the duties and liabilities of the Rights Agent
which shall be governed by and construed in accordance with the laws of the
State of Illinois.
Section 32. Counterparts.
------------
This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
Section 33. Descriptive Headings.
--------------------
Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
-26-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
Attest: A. P. GREEN INDUSTRIES, INC.
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------- -----------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President, Title: President and Chief Executive Officer
Law/Administration and
Secretary
Attest: ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, AS RIGHTS AGENT
By /s/▇▇▇▇ ▇▇▇▇▇▇▇▇ By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------- --------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Trust Administrator Title: Vice President
-27-
EXHIBIT A
[Form of Certificate of Designation]
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
A. P. GREEN INDUSTRIES, INC.
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President -
Law/Administration and Secretary of A.P. Green Industries, Inc., a corporation
organized and existing under The General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 151 thereof, DO HEREBY
CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation, as amended, of the Company, the
said Board of Directors on November 13, 1997 adopted the following resolution
creating a series of One Hundred Twenty Thousand (120,000) shares of voting
Preferred Stock designated as Series B Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Company in accordance with the provisions of its Certificate
of Incorporation, as amended, a series of voting Preferred Stock of the Company
be and it is hereby created, and that the designation and amount thereof and the
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount.
----------------------
There shall be a series of the voting preferred stock of the
Company which shall be designated as the "Series B Junior Participating
Preferred Stock," $1.00 par value, and the number of shares constituting such
series shall be One Hundred Twenty Thousand (120,000). Such number of shares may
be increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series B Junior
Participating Preferred Stock to a number less than that of the shares then
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued
by the Company.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the rights of the holders of any shares of any
series of preferred stock of the Company ranking prior and superior to the
Series B Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series B Junior Participating Preferred Stock, in
preference to the holders of shares of Common Stock, $1.00 par value (the
"Common Stock"), of the Company and of any other junior stock, shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on or
about the 15th of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series B Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $.05 or (b) subject to the
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provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series B Junior Participating
Preferred Stock. In the event the Company shall at any time after November 13,
1997 (the "Rights Declaration Date") declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series B Junior Participating Preferred
Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on
the Series B Junior Participating Preferred Stock as provided in paragraph (A)
of this Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided, however, that in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $.05 per share on the Series B Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series B Junior Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series B Junior Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series B Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights.
-------------
The holders of shares of Series B Junior Participating
Preferred Stock shall have the following voting rights:
(A) Each share of Series B Junior Participating Preferred
Stock shall entitle the holder thereof to 100 votes on all matters submitted to
a vote of the stockholders of the Company.
A-2
(B) Except as otherwise provided herein, in the Company's
Certificate of Incorporation or by law, the holders of shares of Series B Junior
Participating Preferred Stock, the holders of shares of Common Stock, and the
holders of shares of any other capital stock of the Company having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Company.
(C) Except as otherwise set forth herein or in the Company's
Certificate of Incorporation, and except as otherwise provided by law, holders
of Series B Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for taking
any corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever dividends or distributions payable on the Series
B Junior Participating Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Junior Participating Preferred Stock
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series B Junior
Participating Preferred Stock, except dividends paid ratably on the Series B
Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled
(iii) except as permitted in Section 4(A)(iv) below,
redeem or purchase or otherwise acquire for consideration shares of any stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Junior Participating Preferred Stock, provided,
however, that the Company may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of the
Company ranking junior (either as to dividends or upon dissolution, liquidation
or winding up) to the Series B Junior Participating Preferred Stock; and
(iv) purchase or otherwise acquire for consideration any
shares of Series B Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series B Junior Participating Preferred Stock,
except in accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could,
A-3
under paragraph (A) of this Section 4, purchase or otherwise acquire such shares
at such time and in such manner.
Section 5. Reacquired Shares.
-----------------
Any shares of Series B Junior Participating Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. The Company shall
cause all such shares upon their cancellation to be authorized but unissued
shares of Preferred Stock which may be reissued as part of a new series of
Preferred Stock, subject to the conditions and restrictions on issuance set
forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
--------------------------------------
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series B Junior Participating
Preferred Stock shall have received $.25 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series B Liquidation Preference"). Following
the payment of the full amount of the Series B Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series B
Junior Participating Preferred Stock, unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series B
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
paragraph (C) of this Section 6 to reflect such events as stock dividends, and
subdivisions, combinations and consolidations with respect to the Common Stock)
(such number in clause (ii) being referred to as the "Adjustment Number").
Following the payment of the full amount of the Series B Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series B
Junior Participating Preferred Stock and Common Stock, respectively, holders of
Series B Junior Participating Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with respect
to such Series B Junior Participating Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event there are not sufficient assets available to
permit payment in full of the Series B Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series B Junior Participating Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event
there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(C) In the event the Company shall at any time after the
Rights Declaration Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such
A-4
event and the denominator of which is the number of shares of Common Stock that
are outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc.
--------------------------
In case the Company shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series B Junior Participating
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is exchanged or changed. In the event the Company
shall at any time after the Rights Declaration Date declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Junior Participating Preferred Stock
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
are outstanding immediately prior to such event.
Section 8. Redemption.
----------
The shares of Series B Junior Participating Preferred Stock
shall not be redeemable.
Section 9. Ranking.
-------
The Series B Junior Participating Preferred Stock shall rank
junior to all other series of the Company's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Fractional Shares.
-----------------
Series B Junior Participating Preferred Stock may be issued in
fractions which are integral multiples of one one-hundredth of a share.
Fractions of shares of Series B Junior Participating Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by the
Company. The holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Series B Junior Participating Preferred Stock represented by such depositary
receipts.
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate and do affirm and acknowledge the foregoing as true under the
penalties of perjury this ____ day of December, 1997.
_____________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President -
Law/Administration and Secretary
A-5
State of Missouri )
) SS.
County of ________ )
On this _______ day of December, 1997, before me,
_____________________, a Notary Public in and for the State of Missouri,
personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President -
Law/Administration and Secretary of A. P. Green Industries, Inc., Inc., known to
me to be the person who executed the foregoing Certificate of Designation and
acknowledged to me that he executed the same pursuant to authority given by the
Board of Directors of such corporation as their free and voluntary act, and as
the free and voluntary act and deed of such corporation, for the uses and
purposes therein set forth.
_____________________________________________
Notary Public
My commission expires:
________________________________
A-6
EXHIBIT B
[Form Face of Right Certificate]
Certificate No. ______________________ ____________________Rights
NOT EXERCISABLE AFTER JANUARY 6, 2008 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.001 PER RIGHT OR EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A
PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON. THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]*
RIGHT CERTIFICATE
A.P. GREEN INDUSTRIES, INC.
This certifies that _________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights agreement, dated as of November 13, 1997 (the "Rights Agreement"),
between A. P. Green Industries, Inc., a Delaware corporation (the "Company"),
and ▇▇▇▇▇▇ Trust and Savings Bank (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M. (Central time) on January 6, 2008 (the
"Final Expiration Date") at the principal office of the Rights Agent, or its
successor as Rights Agent, one one-hundredth of a fully paid, nonassessable
share of the Series B Junior Participating Preferred Stock, $1.00 par value
("Preferred Stock"), of the Company, at a purchase price of $_________ per one
one-hundredth of a share (the "Purchase Price"), upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase on the reverse
side hereof duly executed. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon exercise of
each Right) and the Purchase Price set forth above, are the number and Purchase
Price as of January 7, 1998, based on the shares of Preferred Stock of the
Company as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Preferred Stock which may be purchased upon the exercise
of each of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
________________________
*The portion of the legend in brackets shall be inserted only as applicable.
B-1
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the Company and the
above-mentioned office of the Rights Agent and are also available upon written
request to the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of shares of Preferred Stock as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive, upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.001 per Right prior to the earlier of (i) the time that
any Person becomes an Acquiring Person (as defined in the Rights Agreement) or
(ii) the Final Expiration Date. Under certain terms and conditions, the Rights
may also be redeemed following the time that any person becomes an Acquiring
Person but prior to the Final Expiration Date, as more fully described in the
Rights Agreement. In addition, subject to the provisions of the Rights
Agreement, the Rights may be exchanged at the option of the Company at any time
after any person becomes an Acquiring Person at an initial exchange ratio of one
share of Common Stock (or one one-hundredth of a share of Preferred Stock) for
each Right exchanged.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts). In
lieu of fractions of a share that are not integral multiples of one-hundredth of
a share of Preferred Stock, a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock, Common Stock or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
B-2
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________________, ______.
Attest A. P. GREEN INDUSTRIES, INC.
By_________________________________ By_____________________________________
Name: Name:
Title: Title:
Countersigned:
___________________________________
By_________________________________
Name:
Title:
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if
such holder desires to transfer the Right
Certificate.)
FOR VALUE RECEIVED _____________________hereby sells, assigns
and transfers unto:_____________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:___________________, ______
___________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:_______________
The signature of the person(s) signing this Right Certificate
must be guaranteed by a participant in the Securities Transfer Agent's Medallion
Program, the Stock Exchange's Medallion Program or the NYSE, Inc. Medallion
Program.
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was, or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:___________________, _____ ___________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
B-4
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate)
To ▇▇▇▇▇▇ Trust and Savings Bank:
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase the
shares of Preferred Stock (or other securities) issuable upon the exercise of
such Rights and requests that certificates for such shares be issued in the name
of:
Name: ____________________________
Address: ____________________________
Social Security or
Taxpayer I.D. No.: ____________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of an delivered to:
Name: ____________________________
Address: ____________________________
Social Security or
Taxpayer I.D. No.: ____________________________
Dated: _______________, ______
___________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
The signature of the person(s) signing this Right
Certificate must be guaranteed by a participant in the Securities Transfer
Agent's Medallion Program, the Stock Exchange's Medallion Program or the NYSE,
Inc. Medallion Program.
B-5
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(3) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _________________, ________
___________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
NOTICE
------
The signature in the foregoing Forms of Assignment and
Election to Purchase must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
EXHIBIT C
[Form of Summary of Preferred Stock Purchase Rights]
Summary of Preferred Stock
Purchase Rights
A. P. GREEN INDUSTRIES, INC.
On November 13, 1997, the Board of Directors of A. P. Green
Industries, Inc. (the "Company") declared a dividend distribution of one
Preferred Stock Purchase Right (collectively, the "Rights") for each outstanding
share of common stock, $1.00 par value (the "Common Stock"), of the Company
(other than shares held in the Company's treasury). The dividend distribution is
payable to the stockholders of record at the close of business on January 7,
1998 (the "Record Date"). Except as set forth below, each Right, when
exercisable, entitles the registered holder to purchase from the Company one
one-hundredth of a share of a new series of voting preferred stock, designated
as Series B Junior Participating Preferred Stock, $1.00 par value (the
"Preferred Stock"), at a price of $45.00 per one one-hundredth of a share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and ▇▇▇▇▇▇ Trust and Savings Bank, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Right
Certificates will be distributed. Until the earlier of (i) ten days following
the first to occur of (a) a public announcement that, without the prior written
consent of the Board of Directors of the Company, a person or group of
affiliated or associated person other than the Company, a subsidiary of the
Company or any employee benefit plan of the Company or a subsidiary of the
Company (an "Acquiring Person") has acquired, or obtained the right to acquire,
outstanding shares of Common Stock of the Company representing 20% or more of
the voting power of the Company or (b) the date on which the Company first has
notice or otherwise determines that a person has become an Acquiring Person (the
"Stock Acquisition Date") or (ii) ten days following the commencement or
announcement of an intention to make a tender offer or exchange offer, without
the prior written consent of the Board of Directors of the Company, for
outstanding shares of such Common Stock representing 20% or more of the voting
power of the Company (the earlier of the dates in clause (i) or (ii) above being
called the "Distribution Date"), the Rights will be evidenced, with respect to
any of the Company's Common Stock certificates outstanding as of and after the
Record Date (other than shares held in the Company's treasury), by such Common
Stock certificates. The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Company's Common
Stock. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), new Common Stock certificates issued after the Record
Date, upon transfer, new issuance or issuance from the Company's treasury of the
Company's Common Stock, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), the surrender for transfer of any of the
Company's Common Stock certificates outstanding as of and after the Record Date
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the
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Company's Common Stock as of the close of business on the Distribution Date and
such separate certificates alone will then evidence the Rights.
Notwithstanding the above, a person will not be deemed to be
an Acquiring Person if such person: (x) becomes the owner of outstanding Shares
of the Common Stock of the Company representing 20% or more of the voting power
of the Company by means of an acquisition of shares of Common Stock directly
from the Company if such acquisition is approved by a majority of the Directors
of the Company who are not Acquiring Persons or affiliates or associates of
Acquiring Persons and who were members of the Company's Board of Directors prior
to the Stock Acquisition Date (the "Continuing Directors") (unless such Person
was an Acquiring Person prior to such acquisition); (y) becomes the owner of
Common Stock representing 20% or more of the voting power of the Company
following an acquisition of the Company's voting securities by the Company,
unless such person subsequently acquires additional voting securities of the
Company (other than by means of a stock dividend, stock split, recapitalization
or similar event); or (z) has become an Acquiring Person inadvertently and
divests promptly a number of voting securities so as to no longer be an
Acquiring Person.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on January 6, 2008, unless earlier redeemed or exchanged
by the Company, as described below.
The Purchase Price payable, the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights and
the number of Rights outstanding are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Preferred Stock, (ii) upon the
distribution to holders of Preferred Stock of rights or warrants to subscribe
for shares of Preferred Stock or securities convertible into Preferred Stock at
less than the then current market price of the Preferred Stock, or (iii) upon
the distribution to holders of Preferred Stock of evidences of indebtedness,
cash or assets (excluding regular periodic cash dividends out of earnings or
retained earnings or dividends payable in Preferred Stock) or of convertible
securities subscription rights or warrants (other than those referred to above).
In the event that, following the Distribution Date, the
Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation or in which the Common Stock
is exchanged or changed or 50% or more of the Company's assets or earning power
is sold (in one transaction or a series of transactions), proper provision shall
be made so that each holder of a Right shall thereafter have the right to
receive, in lieu of shares of Preferred Stock, upon the exercise of the Right
and payment of the Purchase Price, that number of shares of common stock of the
surviving or purchasing company (or, in certain cases, one of its affiliates)
which at the time of such transaction would have a market value of two times the
Purchase Price (such right being called the "Merger Right").
In the event that any person shall become an Acquiring Person
and subject to the availability of Common Stock, proper provision shall be made
so that each holder of a Right will thereafter have the right to receive, in
lieu of shares of Preferred Stock, upon exercise that number of shares (or
fractional shares) of Common Stock having a market value of two times the
Purchase Price, subject to the availability of a sufficient number of treasury
shares or authorized but unissued shares (such right being called the
"Subscription Right"). The holder of a Right will continue to have the Merger
Right unless and until such holder exercises the Subscription Right.
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Any Rights that are beneficially owned by an Acquiring Person
or an Affiliate or an Associate of an Acquiring Person will become null and void
upon the occurrence of any of the events giving rise to the exercisability of
the Merger Right or the Subscription Right and any holder of such Rights will
have no right to exercise such Rights from and after the occurrence of such an
event insofar as they relate to the Merger Right or the Subscription Right.
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares will be issued. In lieu of
fractional shares, an adjustment in cash will be made based on the market price
of the Preferred Stock or the Common Stock as the case may be on the last
trading date prior to the date of exercise.
At any time prior to a Person becoming an Acquiring Person or
January 6, 2008, the Company's Board of Directors may elect to redeem the Rights
in whole, but not in part, at a price of $.001 per Right. Additionally, the
Continuing Directors may redeem the outstanding Rights in whole, but not in
part, at a price of $.001 per Right and prior to an event giving rise to the
Merger Right (i) following a change in a majority of the Directors of the
Company or (ii) following the Stock Acquisition Date, provided that either (a)
the Acquiring Person reduces its beneficial ownership to less than 20% of the
voting power of the Company in a manner satisfactory to the Continuing Directors
and there are no more Acquiring Persons, or (b) such redemption is incidental to
a merger or other business combination involving the Company but not involving
the Acquiring Person. Immediately upon the action of the Board of Directors
electing to redeem the Rights, the Company shall make announcement thereof, and
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the redemption price.
At any time after a Person becomes an Acquiring Person but
prior to such time that any Person becomes the beneficial owner of 50% or more
of the outstanding shares of the Company's Common Stock, the Company may elect
to effect a full or partial exchange of Rights for the Company's Common Stock at
an initial exchange ratio of one share of Common Stock for each Right exchanged.
Alternatively, the Company may elect to effect the exchange of Rights using
Preferred Stock at an initial exchange ratio of one one-hundredth of a share of
Preferred Stock for each Right exchanged.
The Preferred Stock purchasable upon exercise of the Rights
will be non-redeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock). Each
share of Preferred Stock will have a preferential dividend in an amount equal to
the greater of $.05 per share or 100 times any dividend declared on each share
of Common Stock. In the event of liquidation, the holders of Preferred Stock
will receive a preferred liquidation payment equal to the greater of $.25 or 100
times the payment made per each share of Common Stock. Each one one-hundredth of
a share of Preferred Stock will have one vote, voting together with the shares
of Common Stock. In the event of any merger, consolidation or other transaction
in which shares of Common Stock are exchanged, each share of Preferred Stock
will be entitled to receive 100 times the amount and type of consideration
received per share of Common Stock. The rights of the Preferred Stock as to
dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary anti-dilution provisions. Fractional
shares of Preferred Stock in integral multiples of one one-hundredth of a share
of Preferred Stock will be issuable; however, the Company may elect to
distribute depositary receipts in lieu of such fractional shares. In lieu of
fractional shares other than fractions that are multiples of one one-hundredth
of a share, an adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading date prior to the date of exercise.
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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.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
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