EXHIBIT 4A
===============================================================================
RIGHTS AGREEMENT
between
GATX CORPORATION
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
Dated as of July 24, 1998
===============================================================================
-1-
TABLE OF CONTENTS
Page
Section 1. Certain Definitions.........................................1
Section 2. Appointment of Rights Agent.................................5
Section 3. Issuance of Right Certificates..............................5
Section 4. Form of Right Certificates..................................7
Section 5. Countersignature and Registration...........................8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates..........................................9
Section 7. Exercise of Rights; Exercise Price; Expiration Date
of Rights...................................................9
Section 8. Cancellation and Destruction of Right Certificates.........12
Section 9. Availability of Preferred Shares...........................12
Section 10. Preferred Shares Record Date...............................12
Section 11. Adjustment of Exercise Price, Number of Shares or Number
of Rights..................................................13
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.20
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...........................................20
Section 14. Fractional Rights and Fractional Shares....................22
Section 15. Rights of Action...........................................23
Section 16. Agreement of Right Holders.................................24
Section 17. Right Certificate Holder Not Deemed a Shareholder..........24
Section 18. Concerning the Rights Agent................................24
Section 19. Merger or Consolidation or Change of Name of Rights Agent..25
Section 20. Duties of Rights Agent.....................................26
Section 21. Change of Rights Agent.....................................28
Section 22. Issuance of New Right Certificates.........................28
Section 23. Redemption.................................................29
Section 24. Exchange...................................................30
Section 25. Notice of Certain Events...................................31
Section 26. Notices....................................................32
Section 27. Supplements and Amendments.................................32
Section 28. Successors.................................................32
Section 29. Benefits of this Agreement.................................33
Section 30. Severability...............................................33
Section 31. Governing Law..............................................33
Section 32. Counterparts...............................................33
Section 33. Descriptive Headings.......................................33
Section 34. Determinations and Actions by the Board of Directors.......33
Exhibit A Form of Certificate of Amendment of Certificate of
Incorporation Fixing the Number, Designation, Relative
Rights, Preferences and Limitations of the Preferred Stock
Exhibit B Form of Right Certificate
Exhibit C Summary of Shareholder Rights Plan
ii
RIGHTS AGREEMENT
----------------
Rights Agreement, dated as of July 24, 1998 (this "Agreement"),
between GATX Corporation, a New York corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for
each Common Share (as hereinafter defined) of the Company outstanding as of
the close of business on August 14, 1998 (the "Record Date"), each Right
representing the right to purchase one one-thousandth of a Preferred Share
(as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance of
one Right with respect to each Common Share that shall become outstanding
between the Record Date and the Expiration Date (as such term is
hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 12. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 20% or more
of the Common Shares of the Company then outstanding, but shall not include
(i) the Company, (ii) any Subsidiary (as such term is hereinafter defined)
of the Company, or (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person holding Common Shares for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of (i) an
acquisition of Common Shares by the Company which, by reducing the number
of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the Common Shares of
the Company then outstanding, or (ii) the acquisition by such Person of
newly-issued Common Shares directly from the Company (it being understood
that a purchase from an underwriter or other intermediary is not deemed for
purposes hereof to be a purchase directly from the Company); provided,
however, that if a Person shall become the Beneficial Owner of 20% or more
of the Common Shares of the Company then outstanding by reason of share
purchases by the Company or the receipt of newly-issued Common Shares
directly from the Company and shall, after such share purchases or direct
issuance by the Company, become the Beneficial Owner of any additional
Common Shares of the Company, then such Person shall be deemed to be an
"Acquiring Person"; and provided, further, that any transferee from such
Person who becomes the Beneficial Owner of 20% or more of the Common
1
Shares of the Company then outstanding shall nevertheless be deemed to be
an "Acquiring Person". Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph, has become such inadvertently, and such
Person divests as promptly as practicable (and in any event within ten
Business Days after notification by the Company) a sufficient number of
Common Shares so that such Person would no longer be an Acquiring Person,
as defined pursuant to the foregoing provisions of this paragraph, then
such Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to have "beneficial ownership" of or "beneficially own" any
securities:
(A) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(B) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (i) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding, whether written or
oral (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, or to beneficially own, 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
purchase or exchange; (ii) the sole or shared right to vote or dispose of
(including any such right pursuant to any agreement, arrangement or
understanding, whether written or oral); provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or (iii) "beneficial ownership" (as determined pursuant to Rule
13d-3 (or any successor rule) of the General Rules and Regulations under
the Exchange Act); or
(C) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding, whether written or oral (other than customary
agreements with and between underwriters and selling group
2
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the proviso to clause (ii) of subparagraph (b) of this definition) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company,
shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, any "clearing agency", as defined in Section
3(a)(23)(A) of the Exchange Act, which is holding securities solely in its
capacity as a clearing agency, shall not be deemed to be the Beneficial
Owner of such securities.
"Board of Directors" and "Board of Directors of the Company" each
shall mean the members of the board of directors of the Company.
"Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in Illinois or New York are
authorized or obligated by law or executive order to close.
"close of business" on any given date shall mean 5:00 P.M.,
Chicago time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Chicago time, on the next succeeding
Business Day.
"Common Shares" when used with reference to the Company shall mean
the shares of common stock, par value $0.625 per share (as such shares may
be constituted or designated, or as such par value may be changed, from
time to time during the term of this Agreement), of the Company. "Common
Shares" when used with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest voting power
of such other Person or the equity securities or other equity interest
having power to control or direct the management of such other Person.
"Company" shall have the meaning set forth in the preamble hereto.
"current per share market price" shall have the meaning set forth
in Section 11(d) hereof.
"Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
"equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
3
"Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
"Exercise Price" shall have the meaning set forth in Section 4(a)
hereof.
"Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
"Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
"Nasdaq" shall have the meaning set forth in Section 11(d)(i) hereof.
"NYSE" shall have the meaning set forth in Section 11(d)(i) hereof.
"Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity, and shall include
any successor (by merger or otherwise) of such entity.
"Preferred Shares" shall mean shares of Series 2 Junior
Participating Preferred Stock, $1.00 par value per share, of the Company
having the rights, preferences and limitations set forth in the Form of
Certificate of Amendment of Certificate of Incorporation Fixing the Number,
Designation, Relative Rights, Preferences and Limitations of the Preferred
Stock attached to this Agreement as Exhibit A.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Record Date" shall have the meaning set forth in the preamble hereto.
"Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
"Right" shall have the meaning set forth in the preamble hereto.
"Rights Agent" shall have the meaning set forth in the preamble hereto.
"Right Certificate" shall have the meaning set forth in Section 3(a)
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
"Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
4
"Summary of Shareholder Rights Plan" shall have the meaning set
forth in Section 3(b) hereof.
"Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
"Triggering Event" shall mean any event described in Section
11(a)(ii) or Section 13(a) hereof.
Any determination or interpretation required in connection with
any of the definitions contained in this Section 1 shall be made by the
Board of Directors of the Company in their good faith judgment, which
determination shall be final and binding on the Rights Agent.
Section 13. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
agents as it may deem necessary or desirable.
Section 14. Issuance of Right Certificates.
(A) Until the earlier of (i) the close of business on the tenth
day after the Shares Acquisition Date or (ii) the close of business on the
fifteenth Business Day (or such later date as may be determined by action
of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) of, or of the
first public announcement of the intention 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 Common
Shares for or pursuant to the terms of any such plan) to commence, a tender
or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 20% or more of
the then outstanding Common Shares (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 Section 3(b)
hereof) by the certificates for Common Shares registered in the names of
the holders thereof (which certificates shall also be deemed to be
certificates for Rights) and not by separate certificates, and (y) the
Rights will be transferable only in connection with the transfer of the
underlying Common Shares (including a transfer to the Company).
As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each
record holder of Common Shares 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 (a "Right Certificate"), evidencing
5
an aggregate number of Rights equal to one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(B) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Shareholder Rights Plan, in
substantially the form of Exhibit C hereto (the "Summary of Shareholder
Rights Plan"), to each record holder of Common Shares as of the close of
business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate of any Acquiring Person), at the address of such
holder shown on the records of the Company. With respect to certificates
for Common Shares outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates registered in the
names of the holders thereof, together with the Summary of Shareholder
Rights Plan, and registered holders of Common Shares shall also be the
registered holders of the associated Rights. Until the Distribution Date
(or the earlier of the Redemption Date or the Final Expiration Date), the
transfer of any certificate for Common Shares outstanding on the Record
Date, with or without a copy of the Summary of Shareholder Rights Plan,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(C) Subject to adjustment pursuant to Section 11(i), one Right
shall be issued in respect of each Common Share which is issued (whether
originally issued or delivered from the Company's treasury) either (i)
after the Record Date but prior to the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date or (ii) upon the
conversion of shares of $2.50 Cumulative Convertible Preferred Stock or
$2.50 Cumulative Convertible Preferred Stock, Series B after the
Distribution Date but prior to the Expiration Date. Certificates
representing such Common Shares referred to in clause (i) of the
immediately preceding sentence shall also be deemed to be certificates for
Rights. Certificates representing both Common Shares and Rights in
accordance with this Section 3 which are executed and delivered (whether
the Common Shares represented thereby are originally issued, delivered from
the Company's treasury or are presented for transfer) by the Company
(including, without limitation, certificates representing reacquired Common
Shares referred to in the last sentence of this paragraph (c)) after the
Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them a legend substantially
equivalent to the following:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in the Rights Agreement between GATX
Corporation (the "Company") and ChaseMellon Shareholder Services,
L.L.C., dated as of July 24, 1998 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail to
the holder of this certificate a copy of the Rights Agreement, as
in effect on the date of mailing, without charge promptly after
receipt of a
6
written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person
or by any subsequent holder, shall become null and void.
Until the Distribution Date, the Rights associated with the Common Shares
shall be evidenced by the certificates representing the associated Common
Shares alone, and the transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. If the Company purchases or acquires any Common Shares
after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
(D) There will be no adjustments under the $2.50 Cumulative
Convertible Preferred Stock or $2.50 Cumulative Convertible Preferred
Stock, Series B as a result of the issuance of Rights in accordance with
this Agreement. Holders of shares of $2.50 Cumulative Convertible Preferred
Stock and $2.50 Cumulative Convertible Preferred Stock, Series B will not
receive Rights until such shares are converted into Common Shares. During
the period after the Distribution Date and prior to the Expiration Date,
upon conversion of the $2.50 Cumulative Convertible Preferred Stock or
$2.50 Cumulative Convertible Preferred Stock, Series B, each holder thereof
will receive the same number of Rights for each Common Share received by
such holder upon conversion as such holder would have received if the
Distribution Date had not yet occurred.
Section 15. Form of Right Certificates.
(A) The Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in 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 or with
any rule or regulation promulgated pursuant thereto or with any rule or
regulation of any stock exchange or quotation service on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 24 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one one-
thousandths of a Preferred Share as shall be set forth therein at the price
per one one-thousandth of a Preferred Share set forth therein (the
"Exercise Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Exercise Price thereof shall be subject
to adjustment as provided herein.
(B) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or
7
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes an Acquiring Person, or (iii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding, whether written or
oral, regarding the transferred Rights or (B) a transfer which the Board of
Directors otherwise concludes in good faith is part of a plan, arrangement
or understanding, whether written or oral, which has as a primary purpose
or effect avoidance of Section 7(e) hereof, and any Right Certificate
issued pursuant to Section 6 or Section 11 hereof upon the transfer,
exchange, replacement or adjustment of any other Right Certificate referred
to in this sentence, shall contain (to the extent feasible and otherwise
reasonably identifiable as such) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly, this
Right Certificate and the Rights represented hereby may become
void in the circumstances specified in Section 7(e) of such
Agreement.
The provisions of Section 7(e) shall apply whether or not any Right
Certificate actually contains the foregoing legend.
Section 16. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, any Vice-Chairman, the President or any Vice President, either
manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer
of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any officer of
the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Agreement
any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Right
8
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number
of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 17. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(A) Subject to the provisions of Sections 4(b), 7(e), 14 and 24
hereof, at any time after the close of business on the Distribution Date,
and at or prior to the close of business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of Preferred Shares (or, following a
Triggering Event, Common Shares, other securities or property, as the case
may be) 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 or Right
Certificates 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 office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the registered
holder shall have completed and signed the certificate contained in the
form of assignment on the reverse side of such Right Certificate and the
Company shall have been provided with such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request. Thereupon
the Rights Agent shall, subject to Sections 4 and 7 hereof, countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(B) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate, if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered holder in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 18. Exercise of Rights; Exercise Price; Expiration Date of
Rights.
(A) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with
9
the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the office of the Rights Agent designated for such
purpose, together with payment of the Exercise Price with respect to each
surrendered Right for the total number of Preferred Shares (or other
securities or property, as the case may be) as to which the Rights are
exercised, at or prior to the earliest of (i) the close of business on
August 14, 2008 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date") (the earlier of (i) and (ii) being herein referred to as the
"Expiration Date") or (iii) the time at which such Rights are exchanged by
the Company as provided in Section 24 hereof.
(B) The Exercise Price for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $160, shall be
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 representing exercisable
Rights, with the form of election to purchase and the certificate on the
reverse side of the Right Certificate duly executed, accompanied by payment
of the Exercise Price for the shares (or other securities or property, as
the case may be) to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check, cashier's check or
money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the transfer
agent of the Preferred Shares) certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the Company
shall have elected to deposit the Preferred Shares issuable upon exercise
of the Rights with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one- thousandths
of a Preferred Share as are to be purchased (in which case certificates for
the Preferred Shares represented by such receipts shall be deposited by the
transfer agent therefor with the depositary agent) and the Company shall
direct the depositary agent to comply with such request, (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) after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt, deliver such cash
referred to in clause (ii) above to or upon the order of the registered
holder of such Right Certificate. If the Company is obligated to issue
other securities (including Common Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash
and/or property are available for distribution by the Rights Agent, if and
when appropriate.
(D) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to
10
the Rights remaining unexercised shall be issued by the Rights Agent and
delivered 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,
from and after the occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes an Acquiring Person, or (iii) a transferee of an Acquiring
Person (or such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming an Acquiring Person and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding, whether written or
oral, regarding the transferred Rights or (B) a transfer which the Board of
Directors otherwise concludes in good faith is part of a plan, arrangement
or understanding (whether written or oral) which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become null and void
without any further action, and any holder of such Rights shall thereupon
have no rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise, from and after the occurrence of
a Triggering Event. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) hereof are complied with, but
shall have no liability to any holder of Rights with respect to any
determinations regarding an Acquiring Person or its Affiliates, Associates
or transferees hereunder or any failure to make any such determination.
(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 certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise shall have been
completed and signed 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) or Affiliates or Associates
thereof as the Company shall reasonably request.
(G) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares (and, following the occurrence of a Triggering Event, Common Shares
and/or other securities) or any Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
held in its treasury, the number of Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.
(H) Notwithstanding any statement to the contrary contained in
this Agreement or in any Right Certificate, if either the Distribution Date
or the Shares Acquisition Date shall
11
occur prior to the Record Date, the provisions of this Agreement, including
(without limitation) Sections 3 and 11(a)(ii), shall be applicable to the
Rights upon their issuance to the same extent such provisions would have
been applicable if the Record Date were the date of this Agreement.
Section 19. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation or
in canceled form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Right Certificates upon the expiration of
any retention period required by the Securities and Exchange Commission
with respect to such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 20. Availability of Preferred Shares. The Company
covenants and agrees that it will take all such action as may be necessary
to ensure that all Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities), subject to payment of the Exercise
Price, be duly and validly authorized and issued and fully paid and
nonassessable shares.
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 Preferred Shares (or Common Shares and/or other
securities, as the case may be) 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 or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or depositary
receipts for Preferred Shares (or Common Shares and/or other securities, as
the case may be) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is due.
Section 21. Preferred Shares Record Date. Each person in whose name
any certificate for Preferred Shares (or Common Shares and/or other securities,
as the case may be) is issued upon the exercise of Rights shall for all
purposes be deemed to have
12
become the holder of record of the shares or 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
Exercise 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 Shares (or Common Shares and/or other securities, as
the case may be) transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares or
securities on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares (or Common Shares and/or other securities, as the case may
be) 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 22. Adjustment of Exercise Price, Number of Shares or
Number of Rights. The Exercise Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(A) (i) If the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a reclassification
of the Preferred Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Exercise Price in effect immediately prior to
the record date for such dividend or the effective date of such
subdivision, combination or reclassification, as applicable, and the number
and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive the aggregate number and kind of
shares of capital stock which he would have owned upon such exercise and
been entitled to receive as a result of such dividend, subdivision,
combination or reclassification if such Right had been exercised
immediately prior to such date and at a time when the Preferred Shares
transfer books of the Company were open; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, if any
Person becomes an Acquiring Person, each holder of a Right, except as
provided below and in Section 7(e)
13
hereof, shall thereafter have a right to receive, upon exercise thereof at
a price equal to the then current Exercise Price multiplied by the number
of one one-thousandths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of the Company as shall
equal the result obtained by (x) multiplying the then current Exercise
Price by the number of one one-thousandths of a Preferred Share for which a
Right is then exercisable and (y) dividing that product by 50% of the then
current per share market price of the Company's Common Shares (determined
pursuant to Section 11(d) hereof) on the date of the occurrence of such
event. If any Person shall become an Acquiring Person and the Rights shall
then be outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the Rights.
(iii) In lieu of issuing Common Shares of the Company in
accordance with Section 11(a)(ii) hereof, the Company may, in the sole
discretion of the Board of Directors, elect to, and, if the Board of
Directors has not exercised the exchange right contained in Section 24
hereof and there are not sufficient issued but not outstanding and
authorized but unissued Common Shares to permit the exercise in full of the
Rights in accordance with Section 11(a)(ii), the Company shall, take all
such action as may be necessary to authorize, issue or pay, upon the
exercise of Rights, cash (including by way of a reduction of the Exercise
Price), property, or other securities or any combination of the foregoing,
having an aggregate value equal to the value of the Common Shares of the
Company which otherwise would have been issuable pursuant to Section
11(a)(ii), which aggregate value shall be determined by a majority of the
Board of Directors. For purposes of the preceding sentence, the value of
the Common Shares shall be determined pursuant to Section 11(d) hereof and
the value of any equity securities which a majority of the Board of
Directors determines to be a "common stock equivalent" (including the
Preferred Shares, in such ratio as the Board of Directors shall determine)
shall be deemed to have the same value as the Common Shares. Any such
election by the Board of Directors must be made and publicly announced
within 60 days following the date on which the event described in Section
11(a)(ii) shall have occurred. Following the occurrence of the event
described in Section 11(a)(ii), a majority of the Board of Directors then
in office may suspend the exercisability of the Rights for a period of up
to 60 days following the date on which the event described in Section
11(a)(ii) shall have occurred to the extent that such directors have not
determined whether to exercise the Company's right of election under this
Section 11(a)(iii). 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.
(B) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, in the case of a
security convertible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the
14
Preferred Shares (as defined in Section 11(d)) on such record date, the
Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price
and the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in
a consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the
Rights Agent. Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and if such rights, options or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.
(C) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Shares (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 or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Exercise Price
to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable
to one Preferred Share and the denominator of which shall be such current
per share market price of the Preferred Shares; provided, however, that in
no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and if such
distribution is not so made, the Exercise Price shall again be adjusted to
be the Exercise Price which would then be in effect if such record date had
not been fixed.
15
(D) (i) For the purpose of any computation hereunder, other than
under Section 11(a)(iii) hereof, the "current per share market price" of
any security (a "Security" for the purpose of this Section 11(d)(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 such term is
hereinafter defined) immediately prior to such date, and for the purpose of
any computation under Section 11(a)(iii) hereof, the "current per share
market price" of a Security on any date shall be deemed to be the average
of the daily closing prices per share of such Security for thirty (30)
consecutive Trading Days immediately following such date; provided,
however, that if the current per share market price of the 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 such shares (other
than the Rights), 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 per share market price" shall be appropriately adjusted
to reflect the current market price per share equivalent (ex-dividend) 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, Inc. ("NYSE") or, if the Security is not listed or admitted to
trading on the NYSE, 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 quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by any automated quotation system operated by The
Nasdaq Stock Market, Inc. ("Nasdaq") or such other system then in use, or,
if on any such date the Security is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the
Board of Directors of the Company. 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 the Board of Directors of the Company)
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.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i). If
the Preferred Shares are not publicly traded, the "current per share market
price" of the Preferred Shares shall be conclusively deemed to be the
current per share market price of the Common Shares of the Company as
determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the
date hereof), multiplied by one thousand. If neither the Common Shares of
the Company nor the Preferred Shares are publicly held or so listed
16
or traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent.
(E) Anything herein to the contrary notwithstanding, no adjustment
in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Exercise Price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one ten-millionth of
a Preferred Share or one ten-thousandth of any other share or security, as
the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the right to exercise
any Rights.
(F) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other
than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Shares contained in this
Section 11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Preferred Shares shall apply on like terms to any such other shares.
(G) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one one-thousandths
of a Preferred Share purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(H) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Exercise Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of one one-thousandths of a Preferred Share (calculated to the
nearest ten- millionth of a Preferred Share) obtained by (i) multiplying
(x) the number of one- thousandths of a share covered by a Right
immediately prior to this adjustment by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (ii)
dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(I) The Company may elect on or after the date of any adjustment
of the Exercise Price to adjust the number of Rights, in substitution for
any adjustment in the number of one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be
17
exercisable for the number of one-thousandths of a Preferred Share for
which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth)
obtained by dividing the Exercise Price in effect immediately prior to
adjustment of the Exercise Price by the Exercise Price in effect
immediately after adjustment of the Exercise 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 Exercise Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 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 prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(J) Irrespective of any adjustment or change in the Exercise Price
or the number of one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Exercise Price and the number of
one-thousandths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(K) Before taking any action that would cause an adjustment
reducing the Exercise Price below one one-thousandth of the then par value,
if any, of the Preferred Shares 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 Preferred Shares at such adjusted
Exercise Price.
(L) In any case in which this Section 11 shall require that an
adjustment in the Exercise 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 of the Preferred Shares and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the
Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Exercise Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due ββββ or other
18
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(M) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Exercise
Price, in addition to those adjustments expressly required by this Section
11, as and to the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of the
Preferred Shares, issuance wholly for cash of any Preferred Shares at less
than the current market price, issuance wholly for cash of Preferred Shares
or securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such shareholders.
(N) If at any time after the date of this Agreement and prior to
the Distribution Date, the Company shall (i) declare or pay any dividend on
the Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case (i) the number of
one-thousandths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the number
of one-thousandths of a Preferred Share so purchasable immediately prior to
such event by a fraction, the numerator of which is the number of Common
Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such
event, and (ii) each Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
(O) So long as the shares issuable upon the exercise of the Rights
may be listed on any national securities exchange or quotation service, the
Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange or quotation service upon official notice of
issuance upon such exercise.
(P) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date. The Company
will also take such action with respect thereto as may be appropriate under
the blue sky laws of the various states. The Company may temporarily
19
suspend, for a period of time not to exceed 90 days, the exercisability of
the Rights in order to prepare and file such registration statement or in
order to comply with such blue sky laws. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended.
Section 23. Certificate of Adjusted Exercise Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and may assume that no adjustment has been made unless and until
it shall have received such certificate.
Section 24. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(A) If after the Shares Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other
Person, (y) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part
of the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons other than 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 (except as otherwise
provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Exercise Price
multiplied by the number of one-thousandths of a Preferred Share for which
a Right is then exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable Common Shares of
the Principal Party (as hereinafter defined), free and clear of all liens,
rights of call or first refusal, encumbrances or other adverse claims, as
shall equal the result obtained by (A) multiplying the then current
Exercise Price by the number of one-thousandths of a Preferred Share for
which a Right is then exercisable (or, if such Right is not then
exercisable for a number of one-thousandths of a Preferred Share, the
number of such fractional shares for which it was exercisable immediately
prior to an event described under Section 11(a)(ii) hereof) and dividing
that product by (B) 50% of the then current per share market price of the
Common Shares of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, or
otherwise, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company"
20
shall thereafter be deemed to refer to such Principal Party; and (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) 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 its Common Shares thereafter
deliverable upon the exercise of the Rights.
(B) "Principal Party" shall mean:
(i) In the case of any transaction described in (x) or
(y) of the first sentence of Section 13(a), the Person that is the issuer
of any securities into which Common Shares of the Company are converted in
such merger or consolidation, and if no securities are so issued, the
Person that is the surviving entity of such merger or consolidation
(including the Company if applicable); and
(ii) in the case of any transaction described in (z) of
the first sentence in Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case described in clauses (b)(i) and
(b)(ii): (1) if the Common Shares of such Person are not at such time and
have not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Shares of which are and
have been so registered, "Principal Party" shall refer to such other
Person; (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of two or more of which are and
have been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Shares having the greatest aggregate
market value; and (3) 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 (1) and
(2) above shall apply to each of the chains of ownership having an interest
in such joint venture as if such party were a "Subsidiary" of both or all
of such joint venturers and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of such
interests.
(C) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have sufficient
Common Shares authorized to permit the full exercise of the Rights and
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an
21
appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration on Form
10 under the Exchange Act; and
(iii) take such actions as may be necessary or
appropriate under the blue sky laws of the various states. The provisions
of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If one of the transactions
described in Section 13(a) hereof shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii) hereof, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
Section 25. 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 may 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 NYSE or, if the Rights are not listed or admitted
to trading on NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(B) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional
22
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-thousandth of a Preferred Share 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 Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-thousandth of a Preferred
Share, the Company may pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one
one-thousandth of a Preferred Share. For the purposes of this Section
14(b), the current market value of one one-thousandth of a Preferred Share
shall be one one-thousandth of the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise.
(C) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of Common Shares upon exercise of
the Rights or to distribute certificates which evidence fractional Common
Shares. In lieu of fractional Common Shares, the Company may pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one Common Share. For purposes of this
Section 14(c), the current market value of one Common Share shall be the
closing price of one Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
(D) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 26. Rights of Action. All rights of action in respect of
this Agreement, excepting the 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 the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
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 Shares),
may, in his own behalf and for his own benefit, enforce, and may institute
and maintain any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, his right to exercise the Rights evidenced
by such Right Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
23
Section 27. 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 the Common Shares;
(B) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with
appropriate forms and certificates fully executed;
(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 Shares 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 Shares 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; and
(D) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such obligation.
Section 28. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except
as provided in Section 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 29. 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
24
and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares
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, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 30. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation or other entity into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation or other entity resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall
be a party, or any corporation or other entity succeeding to the stock
transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, that such corporation
or other entity 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 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.
25
Section 31. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(A) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(B) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman
of the Board, any Vice-Chairman, the President, any Vice President, the
Treasurer or the Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(C) The Rights Agent shall be liable hereunder to the Company and
any other Person only for all losses, liabilities, costs, damages and
expenses (including attorneys' fees) arising out of, or in connection with,
the Rights Agent's negligence, bad faith or willful misconduct. Anything to
the contrary notwithstanding, in no event shall the Rights Agent be liable
for any special, indirect, consequential or incidental 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.
(D) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(E) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 7(e) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after receipt of a certificate
furnished pursuant to Section 12 describing a change or adjustment); nor
shall it by any act hereunder be deemed to make
26
any representation or warranty as to the authorization or reservation of
any Preferred Shares or Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Preferred Shares or
Common Shares will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(F) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(G) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, any Vice-Chairman, the President, any
Vice President, the Treasurer or the Secretary 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 by it in good
faith in accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions. 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 and/or
after which such action shall be taken or such omission shall be effective.
The Rights Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any 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 specifying the action to be taken or omitted.
(H) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or its Subsidiaries or become pecuniarily
interested in any transaction in which the Company or its Subsidiaries may
be interested, or contract with or lend money to the Company or its
Subsidiaries or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or its Subsidiaries
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.
27
(J) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting
with the Company.
Section 32. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares or Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of
the Common Shares or Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation, bank or other entity organized and doing
business under the laws of the United States or of any other state of the
United States, 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, at the time of its appointment as
Rights Agent, (a) has a combined capital and surplus of at least
$100,000,000 or (b) is an affiliate of an entity having a combined capital
and surplus of at least $100,000,000. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.
Section 33. 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
28
by its Board of Directors to reflect any adjustment or change in the
Exercise Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 34. Redemption.
(A) The Board of Directors of the Company may, at its option, at
any time prior to such time as any Person becomes an Acquiring Person,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). The Company may, at its option, pay the Redemption
Price in cash, Common Shares (based on the current per share market price
of the Common Shares at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. The redemption
of the Rights by the Board of Directors may be made effective at such time
on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. If redemption of the Rights is to be
effective as of a future date, the Rights shall continue to be exercisable,
subject to Section 7 hereof, until the effective date of the redemption,
provided that nothing contained herein shall preclude the Board of
Directors from subsequently causing the Rights to be redeemed at a date
earlier than the scheduled effective date of the redemption.
(B) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (or at the effective time of
such redemption established by the Board of Directors of the Company
pursuant to paragraph (a) of this Section 23), and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give,
or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights or, if later, the effectiveness of
the redemption of the Rights pursuant to the last sentence of paragraph
(a), the Company shall mail a notice of redemption to all the holders of
the then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. 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. The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights, (ii) depositing with a
bank or trust company having a capital and surplus of at least
$100,000,000, funds necessary for such redemption, in trust, to be applied
to the redemption of the Rights so called for redemption and (iii)
arranging for the mailing of the Redemption Price to the registered holders
of the Rights. Upon such action, all outstanding Right Certificates shall
be null and void without further action by the Company. Neither the Company
nor any of its Affiliates
29
or Associates may redeem, acquire or purchase for value any Rights at any
time in any manner other than that specifically set forth in this Section
23, in Section 24 hereof, or in connection with the purchase of Common
Shares prior to the Distribution Date.
Section 35. Exchange.
(A) The Company may, at its option, at any time after a Triggering
Event, upon resolution of a majority of the Board of Directors, 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 Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being the "Exchange Ratio"). Notwithstanding the foregoing, the Company
shall not effect such an exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) becomes the
Beneficial Owner of 50% or more of the then outstanding Common Shares.
(B) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (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 Common Shares
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 Shares 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 Shares (or equivalent preferred
shares, as such term is defined in Section 11(b) hereof) for Common Shares
exchangeable for Rights, at the initial rate of one-thousandth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the Preferred Shares
pursuant to the terms thereof, so that the fraction of a Preferred Share
delivered in lieu of each Common Share shall have the same voting rights as
one Common Share.
(D) If there shall not be sufficient Common Shares or Preferred
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as
30
contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common Shares or
Preferred Shares for issuance upon exchange of the Rights.
(E) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to
the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this paragraph (e), the current market value of
a whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 36. Notice of Certain Events.
(A) In case the Company shall propose at any time after the
Distribution Date (i) to pay any dividend payable in stock of any class to
the holders of its Preferred Shares or to make any other distribution to
the holders of its Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares
or to effect a subdivision, combination or consolidation of the Common
Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give to each
holder of a Right Certificate, 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, or 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 Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever shall be the earlier.
(B) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate,
31
in accordance with Section 26 hereof, a notice of the occurrence of such
event, which notice shall describe such event and the consequences of such
event to holders of Rights under Section 11(a)(ii) hereof.
Section 37. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
GATX Corporation
βββ β. ββββββ ββββββ, ββββ βββββ
βββββββ, ββββββββ βββββ
Attention: Corporate Secretary
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 first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.C.
βββ ββββ ββββ ββββββ, ββββ βββββ
βββ ββββ, βββ ββββ βββββ
Attention: Relationship Manager
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. Notices or demands sent by mail shall be
deemed given or made three Business Days after the date on which they are
sent.
Section 38. 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 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 with respect to the Rights which the Company may deem necessary
or desirable, 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 as 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.
Section 39. 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.
32
Section 40. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares).
Section 41. 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.
Section 42. 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 New York and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
Section 43. 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 44. 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.
Section 45. Determinations and Actions by the Board of Directors.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or the Company or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including
a determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, interpretations and determinations
(including, for purpose of clause (ii) below, all omissions with respect to
the foregoing) which are done or made by the Board of Directors in good
faith, shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties,
and (ii) not subject the Board of Directors to any liability to the holders
of the Right Certificates.
* * * * *
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the day and year first above
written.
Attest: GATX CORPORATION
By: /s/ βββββ ββββββββ By: /s/ βββββ β. ββββββββ
Name: βββββ ββββββββ Name: βββββ β. ββββββββ
Title: Assistant Secretary Title: VP Corporate Development,
General Counsel & Secretary
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ βββββ βββββ By: /s/ ββββββ β. ββββ
Name: βββββ βββββ Name: ββββββ β. ββββ
Title: Vice President Title: Assistant Vice President
34
Exhibit A
----------
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
GATX CORPORATION
Under Section 805 of the Business Corporation Law
-------------------------------------------------
We, the undersigned, being the [Vice] President and [Assistant]
Secretary, respectively, of GATX Corporation, a corporation incorporated
under the laws of the State of New York (the "Corporation"), HEREBY CERTIFY
THAT:
1. The name of the Corporation is GATX Corporation. The name
under which the Corporation was formed is General American Tank Car
Corporation.
2. The Certificate of Incorporation of the Corporation was filed
in the Department of State on July 5, 1916.
3. A. The Certificate of Incorporation is hereby amended by the
addition of a provision stating the number, designation, relative rights,
preferences and limitations of the shares of a new series of Series 2
Junior Participating Preferred Stock as fixed by the Board of Directors of
the Corporation, as authorized by Article THIRD of the Certificate of
Incorporation.
B. To effect the foregoing, the Certificate of Incorporation is
hereby amended by adding the following provision as Article THIRD. F:
THIRD. F: A series of preferred stock, $1.00 par value per share,
of the Corporation (such preferred stock being herein referred to as "Preferred
Stock," which term shall include any additional shares of preferred stock of
the same class heretofore or hereafter authorized to be issued by the
Corporation), consisting of 120,000 shares is hereby created, and the number,
designation, relative rights, preferences and limitations thereof, are
as follows:
Section 1. Designation and Number. There shall be a series of
Preferred Stock of the Corporation which shall be designated as "Series 2
Junior Participating Preferred Stock," $1.00 par value per share
(hereinafter called "Series 2 Junior Preferred Stock"), and the number of
shares constituting such series shall be 120,000. Such number of shares may
be increased or decreased by resolution of the Board of Directors of the
Corporation and by the filing of a Certificate of Amendment of Certificate
of Incorporation pursuant to the provisions of the New York Business
Corporation Law stating that such increase or reduction has been so
authorized; provided, however, that no decrease shall reduce the number of
shares of Series 2 Junior Preferred Stock to a number less than that of the
shares then outstanding plus the number of shares of Series 2 Junior
Preferred Stock issuable upon exercise of outstanding rights, options or
warrants or upon conversion of outstanding securities issued by the
Corporation.
1
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series 2 Junior Preferred Stock with respect to dividends,
the holders of shares of Series 2 Junior Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors of the
Corporation out of funds legally available for such purpose, quarterly
dividends payable in cash to holders of record on the last business day 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 2 Junior Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 and (b) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all cash dividends,
and 1,000 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 (hereinafter defined) or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the common stock, par value $0.625 per share, of the
Corporation (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 2 Junior Preferred Stock. If the Corporation shall at any time
following July 24, 1998 (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series 2
Junior Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying each
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 Corporation shall declare a dividend or distribution on
the Series 2 Junior Preferred Stock as provided in paragraph (A) above at
the time it declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock).
(C) No dividend or distribution (other than a dividend payable
in shares of Common Stock) shall be paid or payable to the holders of
shares of Common Stock unless, prior thereto, all accrued but unpaid
dividends to the date of such dividend or distribution shall have been paid
to the holders of shares of Series 2 Junior Preferred Stock.
(D) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series 2 Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of
Series 2 Junior Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of
issue of such
2
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 2 Junior 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 2 Junior 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 of the Corporation may fix a record date for the
determination of holders of shares of Series 2 Junior Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for
the payment thereof.
Section 3. Voting Rights. The holders of shares of Series 2
Junior Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each one one-thousandth of a share of Series 2 Junior Preferred
Stock shall entitle the holder thereof to one vote on all matters submitted
to a vote of the shareholders of the Corporation. If the Corporation shall
at any time following July 24, 1998 (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the number of votes per
share to which holders of shares of Series 2 Junior Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein or in the Restated
Certificate of Incorporation, as amended from time to time, or by law, the
holders of shares of Series 2 Junior Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of shareholders of the Corporation.
(C) (i) Whenever, at any time or times, dividends payable on any
share or shares of Series 2 Junior Preferred Stock shall be in arrears in
an amount equal to at least six full quarterly dividends (whether or not
declared and whether or not consecutive), the holders of record of the
outstanding Preferred Stock shall have the exclusive right, voting
separately as a single class, to elect a total of two directors of the
Corporation. Such two directors shall be elected initially at a special
meeting of shareholders of the Corporation or at the Corporation's next
annual meeting of shareholders, and subsequently at each annual meeting of
shareholders, as provided below. The term of office of the two directors so
elected shall end on the date of the annual meeting following such
election. At elections for such directors, the holders of shares of Series
2 Junior Preferred Stock shall be entitled
3
to cast one vote for each one one-thousandth of a share of Series 2 Junior
Preferred Stock held.
(ii) Upon the vesting of such right of the holders of the
Preferred Stock, the maximum authorized number of members of the Board of
Directors of the Corporation shall automatically be increased by two and
the two vacancies so created shall be filled by vote of the holders of the
outstanding Preferred Stock as hereinafter set forth. A special meeting of
the shareholders of the Corporation then entitled to vote shall be called
by the Chairman or the President or the Secretary of the Corporation, if
requested in writing by the holders of record of not less than 10% of the
Preferred Stock then outstanding. At such special meeting, or, if no such
special meeting shall have been called, then at the next annual meeting of
shareholders of the Corporation, the holders of the shares of the Preferred
Stock shall elect, voting as above provided, two directors of the
Corporation to fill the aforesaid vacancies created by the automatic
increase in the number of members of the Board of Directors of the
Corporation. The term of office of the two directors so elected shall end
on the date of the annual meeting following such election. At any and all
such meetings for such election, the holders of a majority of the
outstanding shares of the Preferred Stock shall be necessary to constitute
a quorum for such election, whether present in person or by proxy, and such
two directors shall be elected by the vote of at least a plurality of
shares held by such shareholders present or represented at the meeting. Any
director elected by holders of shares of the Preferred Stock pursuant to
this Section may be removed at any annual or special meeting, by vote of a
majority of the shareholders voting as a class who elected such director,
with or without cause. In case any vacancy shall occur among the directors
elected by the holders of the Preferred Stock pursuant to this Section,
such vacancy may be filled by the remaining director so elected, or his
successor then in office, and the director so elected to fill such vacancy
shall serve until the next meeting of shareholders for the election of
directors. After the holders of the Preferred Stock shall have exercised
their right to elect directors in any default period and during the
continuance of such period, the number of directors shall not be further
increased or decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Preferred Stock.
(iii) The right of the holders of the Preferred Stock,
voting separately as a class, to elect two members of the Board of
Directors of the Corporation as aforesaid shall continue until, and only
until, such time as all arrears in dividends (whether or not declared) on
the Preferred Stock shall have been paid or declared and set apart for
payment, at which time such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the event of each and every
subsequent default of the character above-mentioned. Upon any termination
of the right of the holders of the shares of the Preferred Stock as a class
to vote for directors as herein provided, the term of office of all
directors then in office elected by the holders of Preferred Stock pursuant
to this Section shall terminate immediately. Whenever the term of office of
the directors elected by the holders of the Preferred Stock pursuant to
this Section shall terminate and the special voting powers vested in the
holders of the Preferred Stock pursuant to this Section
4
shall have expired, the maximum number of members of the Board of Directors
of the Corporation shall be such number as may be provided for in the
By-laws of the Corporation irrespective of any increase made pursuant to
the provisions of this Section.
(D) Except as set forth herein or in the Restated Certificate of
Incorporation, as amended from time to time, holders of Series 2 Junior
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 and other capital stock of the Corporation as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series 2 Junior Preferred Stock as provided in
Section 2 hereof are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series 2 Junior Preferred Stock outstanding shall have been paid in full,
the Corporation 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 2 Junior
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 2
Junior Preferred Stock, except dividends paid ratably on the Series 2
Junior 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) 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 2
Junior Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the
Series 2 Junior Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series 2 Junior 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.
5
(B) The Corporation shall not permit any direct or indirect
subsidiary of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section, purchase or otherwise acquire
such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series 2 Junior
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein and in the Restated Certificate
of Incorporation of the Corporation, as amended from time to time.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
voluntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to
the Series 2 Junior Preferred Stock unless, prior thereto, the holders of
shares of Series 2 Junior Preferred Stock shall have received $.01 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 2 Liquidation Preference"). Following the payment of the full
amount of the Series 2 Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series 2 Junior 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 2 Liquidation Preference by
(ii) 1,000 (as appropriately adjusted as set forth in subparagraph C below
to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series 2 Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series 2 Junior Preferred Stock and Common Stock,
respectively, holders of Series 2 Junior 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, on a per share
basis, of the Adjustment Number to one with respect to such Preferred Stock
and Common Stock, on a per share basis, respectively.
(B) If, however, there are not sufficient assets available to
permit payment in full of the Series 2 Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series 2 Junior Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences.
(C) If the Corporation shall at any time following July 24, 1998
(i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock or (iii) combine the
outstanding Common Stock into
6
a smaller number of shares, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. If the Corporation 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 2 Junior 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 1,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share
of Common Stock is changed or exchanged. If the Corporation shall at any
time (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series 2 Junior Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series 2 Junior Preferred
Stock shall not be redeemable by the Corporation. The preceding sentence
shall not limit the ability of the Corporation to purchase or otherwise
deal in such shares of stock to the extent permitted by law.
Section 9. Ranking. The Series 2 Junior Preferred Stock shall
rank junior to all other series of the Corporation's preferred stock
(whether with or without par value) as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide
otherwise.
Section 10. Amendment. The Restated Certificate of Incorporation
of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series 2 Junior Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series 2 Junior Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series 2 Junior Preferred Stock
may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series 2 Junior Preferred Stock.
7
4. The amendment to the Certificate of Incorporation of the
Corporation set forth in paragraph 3 of this Certificate was authorized by
the Board of Directors of the Corporation at a meeting of the Board of
Directors duly held on July 24, 1998 pursuant to authority vested in the
Board of Directors by the Certificate of Incorporation of the Corporation.
8
IN WITNESS WHEREOF, we have made and signed this Certificate
this ___ day of July, 1998, and we affirm under penalty of perjury that the
statements contained herein are true.
-----------------------
[Vice] President
-----------------------
[Assistant] Secretary
9
Exhibit B
Form of Right Certificate
Certificate No. R- ____Rights
NOT EXERCISABLE AFTER AUGUST 14, 2008 OR EARLIER IF THE RIGHTS
EXPIRE UNDER CERTAIN CIRCUMSTANCES OR ARE REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*/
Right Certificate
GATX Corporation
This certifies that __________________________, or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of July 24, 1998 (the
"Rights Agreement"), between GATX Corporation, a New York corporation (the
"Company"), and ChaseMellon Shareholder Services, L.L.C. (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. (Chicago time) on August 14, 2008, or notice of redemption or exchange
at the office of the Rights Agent (or its successors as Rights Agent)
designated for such purpose, one one-thousandth of a fully paid
non-assessable share of Series 2 Junior Participating Preferred Stock,
$1.00 par value per share (the "Preferred Shares") of the Company at an
exercise price of $160 per one one-thousandth of a share (the "Exercise
Price") upon presentation and surrender of this Right Certificate with the
appropriate Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Right Certificate (and the
number
----------------------
*/ The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
1
of shares which may be purchased upon exercise thereof) set forth above,
and the Exercise Price per share set forth above, are the number and
Exercise Price as of __________, 199_, based on the Preferred Shares as
constituted at such date. Capitalized terms not defined in this Right
Certificate that are defined in the Rights Agreement shall have the
meanings ascribed to them in the Rights Agreement.
Upon the occurrence of a Triggering Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement), (ii) under certain
circumstances specified in the Rights Agreement, a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a Person
who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void
and no holder hereof shall have any right with respect to such Rights from
and after the occurrence of any such Triggering Event.
As provided in the Rights Agreement, the Exercise Price and the
number and kind of Preferred Shares or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening
of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under certain circumstances
specified in such Rights Agreement. Copies of the Rights Agreement are on
file at the principal corporate trust office of the Rights Agent and are
also available upon written request to the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent designated
for such purpose, 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 Preferred Shares 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 $.01 per Right at any time prior to (i) the time
any Person becomes an Acquiring Person and (ii) the Final Expiration Date.
2
No fractional Preferred Shares will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share, which may at
the election of the Company be evidenced by depository receipts), but in
lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, in such holder's capacity
as such, shall be entitled to vote or receive dividends or be deemed for
any purpose the holder of Preferred Shares 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, in such holder's capacity as such, any of
the rights of a shareholder of the Company or any right to vote for the
election of directors of the Company or upon any matter submitted to
shareholders of the Company at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders of the Company (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _______________, 199_
ATTEST: (SEAL) GATX CORPORATION
_________________________ By:__________________________
Name:____________________ Name:________________________
Title:___________________ Title:_______________________
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By:________________________
Authorized Signature
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.
Date:___________, 19__
_________________________
Signature
Signature Guaranteed:
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); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:__________, 19__
_____________________________
Signature
4
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise Rights represented by the
Right Certificate.)
To: ChaseMellon Shareholder Services, L.L.C.
The undersigned hereby irrevocably elects to exercise____Rights
represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be issued in the
name of:
Please insert social security
or other identifying number:________________________________
______________________________________________________
(Please print name and address)
______________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:________________________________
_____________________________________________________
(Please print name and address)
_____________________________________________________
Dated:_________, 19__
_______________________________
Signature
Signature Guaranteed:
6
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); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated:_______, 19__
______________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
7
Exhibit C
SUMMARY OF SHAREHOLDER RIGHTS PLAN
On July 24, 1998, the Board of Directors of GATX Corporation Inc.
(the "Company") declared a dividend distribution of one Right for each
outstanding share of common stock, par value $0.625 per share (the "Common
Stock"), of the Company to shareholders of record at the close of business
on August 14, 1998 (the "Record Date"). Except as described below, each
Right, when exercisable, entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series 2 Junior Participating
Preferred Stock, $1.00 par value per share (the "Preferred Stock"), at a
price of $160 per one one-thousandth share (the "Exercise 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 ChaseMellon
Shareholder Services, L.L.C., as 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 to occur of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 20% or more of the outstanding
shares of Common Stock (the "Shares Acquisition Date") or (ii) 15 business
days (or such later date as may be determined by action of the Board of
Directors of the Company (the "Board of Directors") prior to the time that
any person becomes an Acquiring Person) following the commencement of (or a
public announcement of an intention to make) a tender or exchange offer if,
upon consummation thereof, such person or group would be the beneficial
owner of 20% or more of such outstanding shares of Common Stock (the
earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced by the Common Stock certificates together with a copy of
this Summary of Shareholder Rights Plan and not by separate certificates.
The Rights Agreement also provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Stock.
Until the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the transfer of any certificates for Common
Stock, with or without a copy of this Summary of Shareholder Rights Plan,
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 Common Stock as
of the close of business on the Distribution Date and, thereafter, such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at the earlier of (i) August 14, 2008 (the "Final Expiration
Date") and (ii) the redemption of the Rights by the Company as described
below.
1
Subject to adjustment, one Right will be issued in respect of each
share of Common Stock which is issued either (i) after the Record Date but
prior to the earliest of the Distribution Date, the redemption of the
Rights or the Final Expiration Date or (ii) upon the conversion of shares
of $2.50 Cumulative Convertible Preferred Stock or $2.50 Cumulative
Convertible Preferred Stock, Series B after the Distribution Date but prior
to the earlier of the redemption of the Rights and the Final Expiration
Date.
If any person (other than the Company, its subsidiaries or any
person receiving newly-issued shares of Common Stock directly from the
Company) becomes the beneficial owner of 20% or more of the then
outstanding shares of Common Stock, each holder of a Right will thereafter
have the right to receive, upon exercise at the then current exercise price
of the Right, Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two times the
exercise price of the Right. The Rights Agreement contains an exemption for
any issuance of Common Stock by the Company directly to any person (for
example, in a private placement or an acquisition by the Company in which
Common Stock is used as consideration), even if that person would become
the beneficial owner of 20% or more of the Common Stock, provided that such
person does not acquire any additional shares of Common Stock.
If, at any time following the Shares Acquisition Date, the Company
is acquired in a merger or other business combination transaction or 50% or
more of the Company's assets or earning power are sold, proper provision
will be made so that each holder of a Right will thereafter have the right
to receive, upon exercise at the then current exercise price of the Right,
common stock of the acquiring or surviving company having a value equal to
two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of any of
the events set forth in the preceding two paragraphs (the "Triggering
Events"), any Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will
immediately become null and void.
The Exercise Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the
Rights, are subject to adjustment from time to time to prevent dilution,
among other circumstances, in the event of a stock dividend on, or a
subdivision, split, combination, consolidation or reclassification of, the
Preferred Stock or the Common Stock, or a reverse split of the outstanding
shares of the Preferred Stock or the Common Stock.
With certain exceptions, no adjustment in the Exercise Price will
be required until cumulative adjustments require an adjustment of at least
1% in the Exercise Price. The Company will not be required to issue
fractional shares of Preferred Stock or Common Stock (other than fractions
in multiples of one-thousandths of a share of Preferred Stock)
2
and, in lieu thereof, an adjustment in cash may be made based on the market
price of the Preferred Stock or Common Stock on the last trading date prior
to the date of exercise.
The Preferred Stock is a new series of preferred stock that is
nonredeemable and that ranks junior to other series of preferred stock of
the Company that are currently issued or may be issued in the future. Each
share of Preferred Stock will be entitled to a minimum preferential
quarterly dividend of $1.00 per share but will be entitled to an aggregate
dividend equal to 1,000 times the dividend declared per share of Common
Stock. In the event of liquidation, each share of Preferred Stock will be
entitled to a minimum preferential liquidation payment of $.01 per share
but will be entitled to an aggregate payment of 1,000 times the payment
made per share of Common Stock. Each share of Preferred Stock will have
1,000 votes, voting together with the Common Stock and other capital stock
of the Company. Finally, 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 1,000 times the amount received
per share of Common Stock. These rights are protected by customary
antidilution provisions. Because of the nature of the Preferred Stock's
dividend, liquidation and voting rights, the value of the one
one-thousandth of a share of Preferred Stock purchasable upon the exercise
of each Right should approximate the value of one share of Common Stock.
At any time after the date of the Rights Agreement until the time
that a person becomes an Acquiring Person, the Board of Directors may
redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"), which may (at the option of the Company) be paid
in cash, shares of Common Stock or other consideration deemed appropriate
by the Board of Directors. Upon the effectiveness of any action of the
Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The Board of Directors of the Company is generally responsible for
administering, interpreting and making all decisions and taking all actions
with respect to the Rights Agreement, including, without limitation, the
decision to redeem or exchange the Rights or to amend the Rights Agreement.
The provisions of the Rights Agreement may be amended by the
Company, except that any amendment adopted after the time that a person
becomes an Acquiring Person may not adversely affect the interests of
holders of Rights.
As of June 30, 1998, there were 49,209,688 shares of Common Stock
outstanding and 4,826,116 shares of Common Stock reserved for issuance
under employee benefit plans or upon conversion of shares of $2.50
Cumulative Convertible Preferred Stock or
3
$2.50 Cumulative Convertible Preferred Stock, Series B. Each outstanding
share of Common Stock on August 14, 1998 will receive one Right. In
addition, each share of Common Stock issued either (i) after the Record
Date but prior to the earliest of the Distribution Date, the redemption of
the Rights and the Final Expiration Date or (ii) upon the conversion of
shares of $2.50 Cumulative Convertible Preferred Stock and $2.50 Cumulative
Convertible Preferred Stock, Series B, after the Record Date but prior to
the earlier of the redemption of the Rights and the Final Expiration Date,
will receive one Right, subject to adjustment as provided in the Rights
Agreement. 120,000 shares of Preferred Stock will be reserved for issuance
in the event of exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
the Company without conditioning the offer on the Rights being redeemed or
a substantial number of Rights being acquired, and under certain
circumstances the Rights beneficially owned by such a person or group will
become void. The Rights should not interfere with any merger or other
business combination approved by the Board of Directors because, if the
Rights would become exercisable as a result of such merger or business
combination, the Board of Directors may, at its option, at any time prior
to the time that any Person becomes an Acquiring Person, redeem all (but
not less than all) of the then outstanding Rights at the Redemption Price.
A copy of the Rights Agreement is being filed with the Securities
and Exchange Commission as an exhibit to two Registration Statements on
Form 8-A, which are being filed with respect to the national securities
exchanges on which the Common Stock is listed. This summary description of
the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
4