OAK INDUSTRIES INC.
and
BANK OF BOSTON
as Rights Agent
Rights Agreement
Dated as of December 7, 1995
TABLE OF CONTENTS
Section Page
Section 1. Certain Definitions 4
Section 2. Appointment of Rights Agent 9
Section 3. Issue of Rights Certificates 9
Section 4. Form of Rights Certificates 11
Section 5. Countersignature and Registration 12
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates 12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 13
Section 8. Cancellation and Destruction of Rights Certificates 15
Section 9. Reservation and Availability of Shares of Preferred Stock;
Other Covenants 15
Section 10. Preferred Stock Record Date; Etc. 17
Section 11. Antidilution Adjustments 17
Section 12. Certificate of Adjustments 27
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 27
Section 14. Fractional Rights and Fractional Shares 29
Section 15. Rights of Action 30
Section 16. Agreement of Rights Holders 30
Section 17. Rights Certificate Holder Not Deemed a Stockholder 31
Section 18. Concerning the Rights Agent 31
Section 19. Merger or Consolidation or Change of
Name of Rights Agent 32
Section 20. Duties of Rights Agent 32
Section 21. Change of Rights Agent 35
Section 22. Issuance of New Rights Certificates 35
Section 23. Redemption and Termination 36
Section 24. Exchange 36
Section 25. Notice of Proposed Actions 38
Section 26. Notices 39
Section 27. Supplements and Amendments 40
Section 28. Successors 40
Section 29. Determinations and Actions by the Board; etc. 40
Section 30. Benefits of this Agreement 40
Section 31. Severability 41
Section 32. Governing Law 41
Section 33. Counterparts 41
Section 34. Descriptive Headings 41
RIGHTS AGREEMENT
This Agreement dated as of December 7, 1995 is between Oak Industries
Inc., a Delaware corporation (the "Company") and Bank of Boston, a national
banking association, (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on December 7, 1995 the Board of Directors of the Company (the
"Board") authorized the issuance of rights (collectively, the "Rights," and
individually a "Right"), each Right being a right to purchase, on the terms
and subject to the provisions of this Agreement, one one-hundredth of a
share of the Company's Junior Preferred Stock; and
WHEREAS, on December 7, 1995 (the "Declaration Date") the Board (a)
authorized and declared a dividend distribution of one Right for every share
of Common Stock of the Company outstanding at the Close of Business on
December 18, 1995 (the "Dividend Record Date"), and (b) authorized the
issuance of, and agreed to issue, one Right (as such number may be adjusted
in accordance with Section 11(i) or 11(p) hereof) for every share of Common
Stock of the Company issued between the Dividend Record Date and the
Distribution Date (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates of such Person, shall be the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding, but shall not include
(i) the Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company, (iv) any
Person organized, appointed, or established by the Company or a Subsidiary
of the Company pursuant to the terms of any plan described in clause (iii)
above or (v) any such Person who has reported to or is required to report
such ownership (but less than 20%) on Schedule 13G under the Exchange Act
(or any comparable or successor report) or on Schedule 13D under the
Exchange Act (or any comparable or successor report) which Schedule 13D does
not state any intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the
Common Stock) and, within 10 Business Days of being requested by the Company
to advise it regarding the same, certifies to the Company that such Person
acquired shares of Common Stock in excess of 19.9% inadvertently or without
knowledge of the terms of the Rights and who, together with all Affiliates
and Associates, thereafter does not acquire additional shares of Common
Stock while the Beneficial Owner of 20% or more of the shares of Common
Stock then outstanding, provided, however, that if the Person requested to
so certify fails to do so within 10 Business Days, then such Person shall
become an Acquiring Person immediately after such 10 Business Day Period.
(b) "Act" shall mean the Securities Act of 1933 (or any successor act),
as amended and as may from time to time be in effect.
(c) "Affiliate," with respect to any Person, shall mean any other
Person who is, or who would be deemed to be, an "affiliate" or an
"associate" of such Person within the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act, as such Rule is in effect on the Declaration Date.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own" or have "Beneficial Ownership" of, any
securities:
(i) which such Person or any of such Person's Affiliates has
"beneficial ownership" of within the meaning of Rule 13d-3 of the General
Rules and Regulations under the Exchange Act, as such Rule is in effect on
the Declaration Date;
(ii) which such Person or any of such Person's Affiliates has,
directly or indirectly, the right to acquire (whether such right is
exercisable immediately or after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon
the exercise of conversion, exchange or other rights, warrants or options,
or otherwise;
(iii) which such Person or any of such Person's Affiliates has,
directly or indirectly, the right to vote or dispose of, including pursuant
to any agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security for purposes of this Section
1(d)(iii) as a result of an agreement, arrangement or understanding to vote
such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable proxy
solicitation rules and regulations promulgated under the Exchange Act or (B)
is made in connection with, or is to otherwise participate in, a proxy or
consent solicitation made, or to be made, pursuant to, and in accordance
with, the applicable proxy solicitation rules and regulations promulgated
under the Exchange Act, in either case described in clause (A) or (B) above,
whether or not such agreement, arrangement or understanding is also then
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iv) which are beneficially owned, directly or indirectly, by any
other Person or any Affiliate thereof with which such Person or any of such
Person's Affiliates has any agreement, arrangement or understanding (whether
or not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or in connection with a proxy or consent
solicitation described in clause (A) or (B) of the proviso to Section
1(d)(iii) hereof) or disposing of any securities of the Company; provided,
however, that for purposes of this Section 1(d) a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates until such tendered securities are accepted for purchase
or exchange, (B) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Common Stock Event, or (C) securities issuable
upon exercise of Rights which were held by a Person or its Affiliates prior
to the Distribution Date as long as such Person is not responsible for the
occurrence of the Common Stock Event giving rise to the Distribution Date;
and provided, further, however, that nothing in this Section 1(d) shall
cause a Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such
acquisition.
(e) "Board" shall have the meaning set forth in the preamble to this
Agreement.
(f) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in The Commonwealth of Massachusetts or
the city in which the principal office of the Rights Agent is located are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M., Boston,
Massachusetts time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Boston, Massachusetts time, on
the next succeeding Business Day.
(h) "Closing Price" shall have the meaning set forth in Section 11(d)
hereof.
(i) "Common Stock" shall mean the Common Stock, with a par value of
$.01 per share, of the Company, except that "Common Stock" when used with
respect to any Person other than the Company shall mean either (i) the
common stock (or other capital stock or shares of beneficial interest) of
such Person with the greatest voting power, or (ii) the equity securities or
other equity interests having power to control or direct the management and
affairs of such Person, or (iii) if such Person is a Subsidiary of another
Person, the Person (A) who ultimately controls such Person who is the
Subsidiary and (B) which has outstanding such common stock (or such other
capital stock, equity securities or interests).
(j) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(k) "Common Stock Event" shall mean the occurrence of any event
described in (i) Section 11(a)(ii) hereof or (ii) clause (a), (b) or (c) of
the first sentence of Section 13 hereof.
(l) "Company" shall have the meaning set forth in the preamble to this
Agreement.
(m) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(n) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(o) "Declaration Date" shall have the meaning set forth in the preamble
to this Agreement.
(p) "Directors" shall mean the members of the Board.
(q) "Disqualified Transferee" shall mean any Person who is a direct or
indirect transferee of any Right from an Acquiring Person or an Affiliate of
an Acquiring Person and became such a transferee (x) after the occurrence of
a Common Stock Event or (y) prior to or concurrently with the Acquiring
Person becoming such and received such Right pursuant to a transfer (whether
or not for value) (A) from the Acquiring Person to holders of its Common
Stock or other equity securities or to any Person with whom the Acquiring
Person has any continuing agreement, arrangement, or understanding (whether
or not in writing) regarding the transferred Right, or (B) which a majority
of the Board reasonably determines is part of a plan, arrangement, or
understanding (whether or not in writing) which has as a primary purpose or
effect, the avoidance of Section 7(e) hereof.
(r) "Distribution Date" shall mean the date which is the later of (A)
the earlier of (x) the 15th Business Day following the Stock Acquisition
Date or (y) the 15th Business Day following the Offer Commencement Date or
(B) such specified or unspecified date thereafter which is on or after the
Dividend Record Date, as may be determined by a majority of the Board.
(s) "Dividend Record Date" shall have the meaning set forth in the
preamble to this Agreement.
(t) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
(u) "Excess Amount" shall have the meaning set forth in Section
11(a)(iii) hereof.
(v) "Exchange Act" shall mean the Securities Exchange Act of 1934 (or
any successor act), as in effect on the Declaration Date.
(w) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(x) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(y) "Offer Commencement Date" shall mean the date of the commencement
by any Person, other than the Company, a Subsidiary of the Company, or any
employee benefit plan of the Company or of any Subsidiary of the Company or
any Person organized, appointed, or established by the Company or such
Subsidiary pursuant to the terms of any such plan, of a tender or exchange
offer (including when such offer is first published or sent or given within
the meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act) if upon consummation thereof the Person and Affiliates thereof
would be the Beneficial Owner of 20% or more of the then outstanding shares
of Common Stock (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights on the Dividend Record
Date or thereafter).
(z) "Officers' Certificate" has the meaning set forth in Section 20(b)
hereof.
(aa) "Other Consideration" has the meaning set forth in Section 6(a)
hereof.
(bb) "Person" shall mean a company, corporation, association,
partnership, joint venture, trust, organization, business, entity or
individual.
(cc) "Preferred Stock" shall mean the Junior Preferred Stock, $.01 par
value, of the Company, having the rights and preferences set forth in the
form of Certificate of Designation attached hereto as Exhibit A.
(dd) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.
(ee) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(ff) "Rights" shall have the meaning set forth in the preamble to this
Agreement.
(gg) "Rights Agent" shall have the meaning set forth in the preamble of
this Agreement subject to the appointment of a successor Rights Agent
pursuant to Section 21 hereof.
(hh) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.
(ii) "Stock Acquisition Date" shall mean the later of (i) the date of
the first public announcement by an Acquiring Person or the Company that an
Acquiring Person has become such (including the first date on which any
filing with any governmental authority disclosing that an Acquiring Person
has become such becomes available to the public), or (ii) the date on which
an executive officer of the Company has actual knowledge that an Acquiring
Person has become such.
(jj) "Subsidiary" shall mean, as of any date, any Person of which the
Company (or other specified parent) owns directly, or indirectly through a
Subsidiary or Subsidiaries, at least a majority of the outstanding capital
stock (or other shares of beneficial interest) entitled to vote generally,
or holds directly, or indirectly through a Subsidiary or Subsidiaries, at
least a majority of partnership or similar interests, or is a general
partner or of which the Company (or other specified parent) owns voting
securities sufficient to elect at least a majority of the directors of such
Person.
(kk) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(mm) "Trading Day" shall mean a day on which the principal national
securities exchange on which such security is listed or admitted to trading
is open for the transaction of business or, if such security is not listed
or admitted to trading on any national securities exchange, a day which is a
Business Day.
Section 2. Appointment of Rights Agent
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from time to
time, upon prior written notice to the Rights Agent, appoint such Co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates
representing shares of Common Stock registered in the names of the holders
of the Common Stock (which certificates shall be deemed also to be
certificates for the associated Rights) and not by separate rights
certificates, and (ii) the Rights will be transferable only in connection
with the transfer of the associated shares of Common Stock. As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the stock transfer records of the Company,
one or more rights certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing in the aggregate that number
of Rights to which such holder is entitled in accordance with the provisions
of this Agreement. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates. The Rights are exercisable
only in accordance with the provisions of Section 7 hereof and are
redeemable only in accordance with Section 23 hereof.
(b) As soon as practicable after the Dividend Record Date, the Company
will cause a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), to be sent by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the
Close of Business on the Dividend Record Date, at the address of such holder
shown on the stock transfer records of the Company. With respect to
certificates for the Common Stock outstanding as of the Dividend Record
Date, until the Distribution Date, the Rights associated with the shares of
Common Stock represented by such certificates will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until
the Distribution Date (or the earlier redemption, expiration or termination
of the Rights), the surrender for transfer of any of the certificates
representing shares of the Common Stock outstanding on the Dividend Record
Date, with or without a copy of the Summary of Rights, shall also constitute
the transfer of the Rights associated with the Common Stock represented by
such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued (whether originally issued or delivered from the Company's treasury)
after the Dividend Record Date but prior to the earliest of (i) the
Distribution Date, (ii) the Expiration Date, or (iii) the redemption of the
Rights. Certificates representing such shares of Common Stock and
certificates issued on transfer of such shares of Common Stock, with or
without a copy of the Summary of Rights, prior to the Distribution Date (or
earlier expiration or redemption of the Rights) shall be deemed also to be
certificates for the associated Rights, and commencing as soon as reasonably
practicable following the Dividend Record Date shall bear the following
legend (or a legend substantially in the form thereof):
This certificate also evidences and entitles the holder to Rights set
forth in a Rights Agreement between the issuer and Bank of Boston, as Rights
Agent (the "Rights Agent"), dated as of December 7, 1995 (the "Rights
Agreement"), the terms of which are incorporated herein by reference and a
copy of which is on file at the principal offices of both the issuer and the
Rights Agent. The Rights Agent will mail to the registered holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge upon written request. Under certain circumstances
set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Under
certain circumstances set forth in the Rights Agreement, Rights issued to,
or held by any Person who is, was or becomes, or acquires shares from, an
Acquiring Person or any Affiliate of an Acquiring Person (as each such term
is defined in the Rights Agreement and generally relating to the ownership
or purchase of large shareholdings), whether currently held by or on behalf
of such Person or Affiliate or by certain subsequent holders, may become
null and void.
Until the Distribution Date or the earlier redemption, expiration or
termination of the Rights, the Rights associated with the Common Stock shall
be evidenced by the Common Stock certificates alone and the registered
holders of Common Stock shall also be the registered holders of the
associated Rights, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the form of assignment and the form of
exercise notice and certificate 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
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 11 and 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Dividend Record
Date (or, if the shares pursuant to which the Rights are attached are issued
thereafter, such date of issuance), shall include the date of
countersignature and on their face shall entitle the holders thereof to
purchase such number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the Purchase Price (as hereinafter defined),
but the amount and type of securities issuable upon the exercise of each
Right and the Purchase Price shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Sections 3(a) or 22
hereof that represents Rights beneficially owned by (i) any Acquiring Person
or any Affiliate of an Acquiring Person, or (ii) any Disqualified
Transferee, and any other Rights Certificate issued pursuant to Sections 6
or 11 hereof upon the transfer, exchange, replacement, or adjustment of any
such Rights Certificate shall contain (to the extent feasible) the following
legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate (which includes both affiliates and associates) of an Acquiring
Person (as each such term is defined in the Rights Agreement between the
issuer and Bank of Boston, as Rights Agent, dated as of December 7, 1995
(the "Rights Agreement")). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement. The Rights Agent will
mail to the registered holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge upon written
request.
Section 5. Countersignature and Registration.
The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President, or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto the Company's seal or
facsimile thereof which shall be attested by the Treasurer or an Assistant
Treasurer of the Company, either manually or by facsimile signature. The
Rights Certificates shall be countersigned, either manually or by facsimile
signature, by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed
any of the Rights Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent, issued, and delivered with the same force and effect as though
the person who signed such Rights Certificates had not ceased to be such
officer of the Company. Any Rights Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights 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 the office of the Rights Agent designated for such purpose,
books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its
face by each of the Rights Certificates, and the date of countersignature
thereof by the Rights Agent.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e), and 14 hereof, at
any time after the Close of Business on the Distribution Date, and at or
prior to the earlier of the Close of Business on the Expiration Date or the
redemption of the Rights, any Rights Certificate may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights
Certificates, entitling the registered holder to purchase a like number of
one one-hundredths of a share of Preferred Stock (or, following a Common
Stock Event, Common Stock and/or such other securities, cash, or other
assets as shall be issuable in respect of the Rights in accordance with the
terms of this Agreement (such other securities, cash or other assets being
referred to herein as "Other Consideration")) as the Rights Certificate
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate to be transferred, split up, combined, or exchanged at the
office of the Rights Agent designated for such purpose, accompanied by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any
such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner from whom the
Rights evidenced by such Rights Certificate are to be transferred (or the
Beneficial Owner to whom such Rights are to be transferred) or Affiliates
thereof as the Company shall reasonably request. Thereupon, subject to
Sections 4(b), 7(e) and 14 hereof, the Company shall execute and the Rights
Agent shall countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment by the holders of Rights 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 Rights Certificates
which the Company is not required to pay in accordance with Section 9(d)
hereof.
(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 Rights Certificate, and, in case of loss, theft or
destruction, the receipt of indemnity or security satisfactory to them, and
upon 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 Rights Certificate, if mutilated, accompanied by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed, or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
(a) Except as otherwise provided herein, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby in whole or in
part at any time from and after the Distribution Date and at or prior to the
Close of Business on December 7, 2005 (the "Expiration Date") or the earlier
redemption of the Rights. At the Expiration Date (or the earlier redemption
of the Rights), all Rights will be extinguished and all Rights Certificates
shall become null and void. To exercise Rights, the registered holder of
the Rights Certificate evidencing such Rights shall surrender such Rights
Certificate, with the form of election to purchase on the reverse side
thereof and the certificate contained therein duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose,
accompanied by a signature guarantee and such other documentation as the
Rights Agent may reasonably request, together with payment in cash, only if
by electronic or wire transfer, or by certified check or bank check, of the
Purchase Price with respect to the total number of one one-hundredths of a
share of Preferred Stock (or, after a Common Stock Event, shares and/or
similar units of Common Stock or Other Consideration) as to which the Rights
are exercised (which payment shall include any additional amount payable by
such Person in accordance with Section 9(d) hereof). The Rights Agent shall
promptly deliver to the Company all payments of the Purchase Price received
in respect of Rights Certificates accepted for exercise.
(b) The purchase price for each one one-hundredth of a share of
Preferred Stock issuable pursuant to the exercise of a Right (the "Purchase
Price") shall initially be $125, shall be subject to adjustment as provided
in Section 11 hereof, and shall be payable in lawful money of the United
States of America.
(c) Upon receipt of a Rights Certificate representing the Rights, with
the form of election to purchase set forth on the reverse side thereof and
the certificate contained therein duly executed, accompanied by payment of
the Purchase Price, with respect to each Right so exercised, the Rights
Agent, subject to Sections 7(e), 11(a)(iii) and 20(k) hereof, shall
thereupon promptly (i) requisition from any transfer agent of the Preferred
Stock (or Common Stock) (or from the Company if there shall be no such
transfer agent, or make available if the Rights Agent is such transfer
agent) certificates for the total number of one one-hundredths of a share of
Preferred Stock (or Common Stock) to be purchased and the Company hereby
irrevocably authorizes such transfer agent to comply with any such request,
(ii) after receipt of such certificates, cause the same to be delivered to
or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated in writing by such
holder, and (iii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of a fractional share in accordance
with Section 14 hereof and after receipt promptly deliver such cash to or
upon the order of the registered holder of such Rights Certificate. After
the occurrence of a Common Stock Event, the Company will make all necessary
arrangements so that any Other Consideration then deliverable in respect of
the Rights is available for distribution by the Rights Agent. For purposes
of this Section 7, the Rights Agent shall be entitled to rely, and shall be
protected in relying, on an Officers' Certificate from the Company to the
effect that the Distribution Date has occurred.
(d) Subject to Sections 4(b), 7(e) and 14 hereof, in case the
registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be executed and
delivered by the Company to the Rights Agent and countersigned and delivered
by the Rights Agent to the registered holder of such Rights Certificate or
to his duly authorized assigns.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Common Stock Event, any Rights
beneficially owned by (i) an Acquiring Person or an Affiliate of an
Acquiring Person, or (ii) a Disqualified Transferee shall become null and
void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but the Company shall have no liability to any
holder of Rights Certificates or other Person and none of the terms of this
Agreement or the Rights shall be deemed to be waived with respect to such
holder or other Person as a result of any failure by the Company to make any
determinations with respect to an Acquiring Person or any Affiliate of an
Acquiring Person or Disqualified Transferees hereunder or any failure to
have a legend placed on any Rights Certificate in accordance with Section
4(b) hereof or on any Common Stock certificate in accordance with Section
3(c) hereof.
(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 holder of any Rights Certificate upon the occurrence of
any purported exercise thereof unless such holder shall have (i) completed
and signed the certificate contained in the form of election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner from whom the Rights evidenced by such Rights Certificate
are to be transferred (or the Beneficial Owner to whom such Rights are to be
transferred) or Affiliates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates
All Rights Certificates surrendered for the purpose of and accepted for
exercise, or surrendered for the purpose of redemption, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of
its agents (other than the Rights Agent), 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 Rights Certificates shall be issued
in lieu thereof except as expressly permitted by any of the provisions of
this Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificates purchased or retired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or may, at the written
request of the Company, but shall not be required to, destroy such canceled
Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Preferred Stock; Other
Covenants
(a) The Company covenants and agrees that on and after the Distribution
Date, it will use reasonable efforts to cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (or,
following the occurrence of a Common Stock Event, out of its authorized and
unissued shares of Common Stock and/or other securities, or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (or, following a Common Stock Event, shares of Common Stock
and/or other securities) that, except as provided in Section 11(a)(iii)
hereof, would then be sufficient to permit the exercise in full of all
outstanding Rights; provided, however, that the reservation of such shares
shall be subject and subordinate to any other reservation of such shares
made by the Company at any time for any lawful purpose; provided, further,
however, that in no event shall such failure to so reserve shares affect the
rights of any holder of Rights hereunder.
(b) The Company covenants and agrees that on and after the Distribution
Date so long as the Preferred Stock (or, following a Common Stock Event,
shares of Common Stock and/or other securities and/or Other Consideration)
issuable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause all
shares (or similar units) reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that each one one-hundredth of a share of
Preferred Stock (or, following a Common Stock Event, each share and/or
similar unit of Common Stock or Other Consideration) delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such shares
(or units), subject to payment of the Purchase Price, be duly and validly
authorized and issued and fully paid and nonassessable.
(d) The Company covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and similar charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates or of any shares of Preferred Stock (or, following the
occurrence of a Common Stock Event, each share and/or similar units of
Common Stock or Other Consideration) upon the exercise of Rights; provided,
however, that the Company shall not be required to pay any transfer tax
which may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or in the issuance or delivery of
certificates for any shares of Preferred Stock (or, following the occurrence
of a Common Stock Event, each share and/or similar units of Common Stock or
Other Consideration) in a name other than that of the registered holder of
the Rights Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates for any shares of Preferred Stock (and,
following the occurrence of a Common Stock Event, all shares and/or similar
units of Common Stock or Other Consideration) upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Rights Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax is
due.
(e) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the first occurrence of a
Common Stock Event on which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with this
Agreement, or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Act, with respect to
the securities issuable upon exercise of the Rights on an appropriate form,
(ii) to cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, or (B) the Expiration
Date or earlier redemption of the Rights. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(e), the exercisability of
the Rights in order to prepare and file such registration statement or to
permit it to become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended. The Company shall thereafter issue a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
Section 10. Preferred Stock Record Date; Etc.
Each person in whose name any certificate for any shares of Preferred
Stock (or, following the occurrence of a Common Stock Event, shares and/or
similar units of Common Stock or Other Consideration) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or such
shares and similar units of Common Stock and/or Other Consideration, as the
case may be) represented thereby, and such certificate shall be dated the
date which is the later of (i) the date upon which the Rights Certificate
evidencing such Rights was duly surrendered, or (ii) the date upon which
payment of the Purchase Price (and any applicable transfer taxes) in respect
thereof was made; provided, however, that if such date is a date upon which
the relevant transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares (or Other
Consideration) on, and such certificate shall be dated, the next succeeding
Business Day on which such transfer books of the Company are open; provided,
further, that the Company covenants and agrees that it shall not close such
transfer books for a period exceeding ten consecutive days. Prior to the
exercise of the Rights evidenced thereby (which shall be deemed to have
occurred on the date such certificate for shares of Preferred Stock, Common
Stock or other securities shall be dated in accordance with this Section
10), the holder of a Rights Certificate, as such, shall not be entitled to
any rights of a security holder of the Company with respect to the shares of
Preferred Stock or Common Stock (and/or such shares or similar units of
Common Stock or Other Consideration) 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 expressly provided herein.
Section 11. Antidilution Adjustments.
The Purchase Price and the number and kind of securities covered by each
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event that the Company shall at any time after the
Declaration Date (A) declare and pay a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares, or (D) issue, change, or alter any of its shares of
capital stock in a reclassification or recapitalization (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving Person), except as otherwise provided
in this Section 11(a) and Section 7(e) hereof, then, and in each such case,
the Purchase Price in effect at the time of the record date for such
dividend or the effective time of such subdivision, combination,
reclassification or recapitalization, and the number and kind of shares of
capital stock issuable at such time, 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 Preferred Stock or other
capital stock which, if such Right had been exercised immediately prior to
such time at the Purchase Price then in effect and at a time when the
transfer books for the Preferred Stock (or other capital stock) of the
Company were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination,
reclassification or recapitalization. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) In the event
(A) any Person shall at any time after the Declaration Date
become an Acquiring Person; or
(B) any Acquiring Person or any Affiliate of any Acquiring
Person, at any time after the Declaration Date, directly or indirectly,
shall (1) merge into the Company or otherwise combine with the Company, and
the Company shall be the continuing or surviving corporation of such merger
or combination and the Common Stock of the Company shall remain outstanding
and no shares thereof shall be changed or otherwise transformed into stock
or other securities of any other Person or the Company or cash or any other
property, (2) in one or more transactions, transfer any assets to the
Company in exchange (in whole or in part) for shares of any class of its
equity securities or for securities exercisable for or convertible into
shares of any such class or otherwise obtain from the Company, with or
without consideration, any additional shares of any such class or securities
exercisable for or convertible into shares of any such class (other than as
part of a pro rata distribution to all holders of such class), (3) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose
(in one transaction or a series of transactions) to, from or with the
Company or any of the Company's Subsidiaries, assets with an aggregate fair
market value in excess of 25% of the assets of the Company on terms and
conditions less favorable to the Company than the Company would be able to
obtain through arm's-length negotiation with an unaffiliated third party,
(4) receive any compensation from the Company or any of the Company's
Subsidiaries other than compensation as a director of the Company or for
full-time employment as a regular employee at rates in accordance with the
Company's (or such Subsidiary's) past practices, (5) receive the benefit
(except proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance provided by the Company or
any of its Subsidiaries on terms and conditions less favorable to the
Company than the Company would be able to obtain through arm's-length
negotiation with an unaffiliated third party or (6) commence a tender or
exchange offer for securities of the Company; or
(C) during such time as there is an Acquiring Person at any time
after the Declaration Date, there shall be any reclassification of
securities (including any combination thereof), or recapitalization of the
Company, or any merger or consolidation of the Company with any of its
Subsidiaries, or any repurchase by the Company or any of its Subsidiaries of
shares of the Common Stock of the Company, or any other class or series of
securities issued by the Company, which reclassification, recapitalization,
merger or consolidation or repurchase is effected at a time when a majority
of the Board of Directors of the Company consists of persons who are the
Acquiring Person or its Affiliates, nominees or designees thereof (whether
or not with or into or otherwise involving an Acquiring Person or any
Affiliate of an Acquiring Person), which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities or securities
exercisable for or convertible into any class of equity securities of the
Company or any of its Subsidiaries which is directly or indirectly owned by
an Acquiring Person or any Affiliate of an Acquiring Person then, in each
such case, upon the Close of Business 15 Business Days after the occurrence
of such event, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon exercise thereof at the Purchase Price in effect at
the time of exercise in accordance with the terms of this Agreement, in lieu
of a number of one one-hundredths of a share of Preferred Stock, such number
of shares of Common Stock of the Company as shall equal the result obtained
by (x) multiplying an amount equal to the then current Purchase Price by an
amount equal to the number of one one-hundredths of a share of Preferred
Stock for which a Right was or would have been exercisable immediately prior
to the first occurrence of any such event whether or not such Right was then
exercisable, and (y) dividing that product by 50% of the Current Market
Price per share of the Common Stock of the Company (as defined in Section
11(d) hereof) determined as of the date of such first occurrence.
(iii) In lieu of issuing whole or fractional shares of Common Stock
in accordance with Section 7(c) hereof, the Company shall (i) in the event
that the number of shares of Common Stock which are authorized by the
Company's charter but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights are not sufficient to permit the
exercise in full of the Rights in accordance with Section 7(c) hereof, or
(ii) if a majority of the Board determines that it would be appropriate and
not contrary to the interests of the holders of Rights (other than any
Acquiring Person or Disqualified Transferee or any Affiliate of the
Acquiring Person or Disqualified Transferee), (A) determine an amount, if
any, (the "Excess Amount") equal to the excess of (1) the value (the
"Current Value") of the whole or fractional shares of Preferred Stock (or
Common Stock) issuable upon the exercise of a Right in accordance with
Section 7(c) hereof, over (2) the Purchase Price, and (B) with respect to
each Right, (subject to Section 7(e) hereof) make adequate provision to
substitute for such whole or fractional shares of Preferred Stock (or Common
Stock), upon payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares or units of Preferred
Stock or preferred stock which the Board has deemed in good faith to have
the same value as a share of Common Stock (such shares of preferred stock
being referred to herein as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing (which would include the additional consideration provided to any
holder by reducing the Purchase Price) having an aggregate value equal to
the Current Value, where such aggregate value has been determined by the
Board; provided, however, subject to the provisions of Section 9(e), that if
the Company shall not have made adequate provision to deliver value pursuant
to clause (B) above within 30 days following the Close of Business 15
Business Days after the first occurrence of a Common Stock Event described
in Section 11(a)(ii) hereof, then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring payment of
the Purchase Price, whole or fractional shares of Preferred Stock (or Common
Stock) (to the extent available) and then, if necessary, cash, securities,
and/or assets which in the aggregate are equal to the Excess Amount. If the
Board shall determine in good faith that it is likely that sufficient
additional shares of Common Stock or Common Stock Equivalents could be
authorized for issuance upon exercise in full of the Rights, the 30 day
period set forth above may be extended to the extent necessary, but not more
than 90 days following the Close of Business 15 Business Days after the
first occurrence of such a Common Stock Event (such 30 day period) as it may
be extended to 90 days, is referred to herein as the "Substitution Period").
To the extent that the Company determines that some action is to be taken
pursuant to the preceding provisions of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that (except as to the
form of consideration which shall be determined as appropriate by a majority
of the Board) such action shall apply uniformly to all outstanding Rights
which shall not have become null and void, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such provisions and
to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended. The Company shall thereafter
issue a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common
Stock issuable upon exercise of a Right in accordance with Section 7(c)
hereof shall be the Current Market Price per share of the Common Stock (as
determined pursuant to Section 11(d) hereof) on the Close of Business 15
Business Days after the date of the first occurrence of such a Common Stock
Event and the value of any Common Stock Equivalent shall be deemed to be
equal to the Current Market Price per share of the Common Stock on such
date.
(b) In the event the Company shall, after the Dividend Record Date, fix
a record date for the issuance of any options, warrants, or other rights to
all holders of Preferred Stock entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase (i)
Preferred Stock or (ii) shares having the same rights, privileges and
preferences as the shares of any number of one one-hundredths of a share of
Preferred Stock ("Equivalent Preferred Stock") or (iii) securities
convertible into Preferred Stock or Equivalent Preferred Stock at a price
per share of Preferred Stock or Equivalent Preferred Stock (or having a
conversion price per share of Common Stock, if a security is convertible
into Preferred Stock or Equivalent Preferred Stock) less than the Current
Market Price per share of Preferred Stock (determined in accordance with
Section 11(d) hereof) determined as of such record date, the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock and/or Equivalent Preferred Stock which the aggregate minimum offering
price of the total number of shares of one one-hundredths of a share of
Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or
the aggregate minimum conversion price of such convertible securities so to
be offered) would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Preferred Stock outstanding on
such record date plus the maximum number of additional shares of Preferred
Stock and/or Equivalent Preferred Stock to be offered for subscription or
purchase (or the maximum number of shares into which such convertible
securities so to be offered are convertible). In case such subscription
price may be paid by delivery of consideration part or all of which shall be
in a form other than cash, for purposes of this Section 11(b) the value of
such consideration shall be the fair market value thereof as determined in
good faith by the Board (which determination shall be described in an
Officers' Certificate filed with the Rights Agent). Shares of Preferred
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed; and in the event
that such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed (subject, however, to such other adjustments
as are provided herein).
(c) In the event that the Company shall, after the Dividend Record
Date, fix a record date for the making of a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving or continuing
Person) of evidences of indebtedness, cash (other than cash dividends paid
out of the earnings or retained earnings of the Company and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied), other property (other than a
dividend payable in a number of one one-hundredths of a share of Preferred
Stock, but including any dividend payable in capital stock other than
Preferred Stock), or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, of which the
numerator shall be the Current Market Price per share of Preferred Stock (as
defined in Section 11(d) hereof) determined as of such record date, less the
sum of that portion of cash plus the fair market value, as determined in
good faith by the Board (which determination shall be described in an
Officers' Certificate filed with the Rights Agent) of that portion of such
evidences of indebtedness, such other property, and/or such subscription
rights or warrants applicable to one share of Common Stock and of which the
denominator shall be such Current Market Price per share of the Preferred
Stock. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed (subject, however,
to such other adjustments as are provided herein).
(d) For purposes of any computation pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share (or unit) of any security on
any date shall be deemed to be the average of the daily Closing Price of
such security for the 10 consecutive Trading Days immediately after such
date and for the purpose of any other computation hereunder, the "Current
Market Price" per share (or unit) of any security on any date shall be
deemed to be the average of the daily Closing Price of such security for the
20 consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the Current Market Price per share of such
security is determined during a period following the announcement by the
issuer of such security of (i) a dividend or distribution on such security
payable in shares (or units) of such security or securities convertible into
shares (or units) of such security, or (ii) any subdivision, combination or
reclassification of such security, and prior to the expiration of such 10
Trading Days or 20 Trading Days after (A) the ex-dividend date for such
dividend or distribution, or (B) the record date for such subdivision,
combination or reclassification, as the case may be, then, and in each such
case, the "Current Market Price" shall be the Closing Price of such security
on the last day of such respective 10 Trading Day or 20 Trading Day period.
For purposes of this Agreement, the "Closing Price" of any security on any
day shall be the last sale price, regular way, with respect to shares (or
units) of such security, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, with respect
to such security, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange; or, if such security is not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
such security is listed or admitted to trading; or, if such security is not
so listed or admitted to trading, the last quoted sale price with respect to
shares (or units) of such security, or, if not so quoted, as the average of
the high bid and low asked prices in the over-the-counter market with
respect to shares (or units) of such security, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or such
other similar system then in use; or, if on any such date such security is
not quoted by any such organization, the average of the closing bid and
asked prices with respect to shares (or units) of such security, as
furnished by a professional market maker making a market in such security
selected by the Board; or, if no such market maker is available, the fair
market value of shares (or units) of such security as of such day as
determined in good faith by the Board (which determination shall be
described in an Officers' Certificate filed with the Rights Agent);
provided, however, that the "Closing Price" of one one-hundredth of a share
of Preferred Stock as of any Trading Day shall be equal to the Closing Price
of a whole share of Preferred Stock on such Trading Day divided by 100;
provided, further, that if the Closing Price of such a share of Preferred
Stock as of any Trading Day cannot be reasonably determined by the foregoing
provisions, the "Closing Price" of one one-hundredth of a share of Preferred
Stock on such Trading Date shall be the Closing Price of a share of Common
Stock on such Trading Day.
(e) No adjustment in the Purchase Price shall be required unless
adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest (x) ten-
thousandth of a share (or similar unit) of Common Stock or securities other
than Preferred Stock or Equivalent Preferred Stock or (y) one-millionth of a
share of Preferred Stock or Equivalent Preferred Stock. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from
the date of the transaction which mandates the adjustment or (ii) the date
of the expiration of the right to exercise the Rights. Anything in this
Section 11 to the contrary notwithstanding, the Company shall be entitled to
make such reductions in the Purchase Price, in addition to those required by
this Section 11, as it in its discretion shall determine to be advisable in
order that any dividends, subdivision of shares, distribution of rights to
purchase shares of beneficial interest or other stock or securities, or
distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
(f) In the event that at any time, as a result of an adjustment made in
respect of a Common Stock Event, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of
the Company other than shares of Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with
respect to such other shares contained in Sections 11(a), (b), (c), (e),
(g), (h), (i), (j), (k), (m) and (p) hereof, and the provisions of Sections
7, 9, 10, 11(d), 13 and 14 hereof with respect to the shares of Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights represented thereby, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result
of the calculations made pursuant to Sections 11(b) and 11(c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a share of Preferred Stock (calculated
to the nearest one-millionth of a share) obtained by (i) multiplying (x) the
number of one one-hundredths of a share of Preferred Stock covered by a
Right immediately prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) Assuming that no other adjustment pursuant to this Section 11 has
been made, the Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights in substitution for any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price by the Purchase Price in effect immediately after such
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least 10 days later than the date
of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i) the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such adjustment, or,
at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued, executed, and
countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of whole or fractional shares of Preferred Stock issuable upon
exercise of such Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number
of one one-hundredths of a share of Preferred Stock which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the number of one
one-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue such number of fully paid and nonassessable one one-
hundredths of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record
date the number of one one-hundredths of a share of Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-hundredths of a share of
Preferred Stock or other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver
to such holder a due ▇▇▇▇ or other appropriate instrument evidencing such
holder's right to receive such additional securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it, by means of a resolution of the Board acting in good
faith, shall determine to be advisable in order that any consolidation or
subdivision of the Common Stock, issuance wholly for cash of any Common
Stock at less than the Current Market Price thereof, issuance wholly for
cash of Common Stock (or other securities which by their terms are
convertible into or exchangeable for Common Stock), dividends payable in
shares of Common Stock or other capital stock or shares of beneficial
interest, or issuance of rights, options, or warrants referred to
hereinabove in this Section 11, hereafter made or declared by the Company to
the holders of its Common Stock, shall not be taxable to such holders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or a series of related transactions, more than
25% of (A) the assets (taken at net asset value as stated on the books of
the Company and determined on a consolidated basis in accordance with
generally accepted accounting principles consistently applied) or (B) the
earning power of the Company and its Subsidiaries (determined on a
consolidated basis in accordance with generally accepted accounting
principles consistently applied) to any other Person or Persons (other than
the Company or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale, there are any rights,
warrants or other instruments or securities outstanding or agreements
(whether or not in writing) in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or
(y) prior to, simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of such other Person shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or 27 hereof, take (or permit
any Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Dividend Declaration Date
and prior to the Distribution Date (i) declare or pay a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, or
(ii) effect a subdivision, combination or consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment of dividends
in shares of Common Stock) into a greater or smaller number of shares, then
in any such case, (i) the number of one one-hundredths of a share of
Preferred Stock purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one one-hundredths of
a share of Preferred Stock so purchasable immediately prior to such event by
a fraction the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event; and
(ii) each share of Common Stock outstanding immediately after such event
shall have issued with respect to it that number of Rights which each share
of Common Stock outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjustments.
Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall (a) promptly prepare an Officers' Certificate setting
forth such adjustment, including any adjustment in Purchase Price, the
number of shares or Other Consideration payable, and a brief statement of
the facts accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Preferred Stock and Common Stock
a copy of such Officers' Certificate, and (c) mail a brief summary thereof
to each registered holder of a Rights Certificate in accordance with Section
26 hereof. The Rights Agent shall be fully protected in relying on any such
Officers' Certificate and on any adjustment therein contained, and shall not
be deemed to have knowledge of any such adjustment unless and until it shall
have received such an Officers' Certificate.
Section 13. Consolidated, Merger or Sale or Transfer of Assets or Earning
Power
In the event that, following the Stock Acquisition Date, directly or
indirectly, (a) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof) and the Company shall not be the
continuing or surviving Person of such consolidation or merger, (b) any
Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) shall consolidate with, or merge with
and into, the Company, the Company shall be the continuing or surviving
Person of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the Common Stock of the Company
shall be changed or otherwise transformed into other stock or other
securities of any other Person or the Company or cash or any other property,
or (c) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, more than 25% of (A) the assets (taken at
net asset value as stated on the books of the Company and determined on a
consolidated basis in accordance with generally accepted accounting
principles consistently applied) or (B) the earning power of the Company and
its Subsidiaries (determined on a consolidated basis in accordance with
generally accepted accounting principles consistently applied) to any Person
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof) then, from
and after such event, proper provision shall be made so that (i) each holder
of a Right, except as provided in Section 7(e) hereof, shall thereafter have
the right to receive, upon the exercise thereof at the Purchase Price in
effect at the time of such exercise in accordance with the terms of this
Agreement, such number of whole or fractional shares of validly authorized
and issued, fully paid, non-assessable, and freely tradeable Common Stock of
such other Person (or in the case of a transaction or series of transactions
described in clause (c) above, the Person receiving the greatest amount of
the assets or earning power of the Company, or if the Common Stock of such
other Person is not and has not been continuously registered under Section
12 of the Exchange Act for the preceding 12-month period and such Person is
a direct or indirect Subsidiary of another Person, that other Person, or if
such other Person is a direct or indirect Subsidiary of more than one other
Person, the Common Stock of two or more of which are and have been so
registered, such other Person whose issued Common Stock has the greatest
aggregate value), free and clear of any liens, encumbrances, rights of first
refusal, or other adverse claims, as shall be equal to the result obtained
by (x) multiplying the Purchase Price in effect immediately prior to the
first occurrence of any Common Stock Event under this Section 13 by the
number of one one-hundredths of a share of Preferred Stock for which a Right
is exercisable immediately prior to such first occurrence (and without
taking into account any prior adjustment made pursuant to 11(a)(ii)) and (y)
dividing that product by 50% of the Current Market Price per share (as
defined in Section 11(d) hereof) of the Common Stock of such other Person
determined as of the date of consummation of such consolidation, merger,
sale, or transfer; (ii) the issuer of such Common Stock shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale,
or transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed, for all
purposes of this Agreement, to refer to such issuer, it being specifically
intended that the provisions of Section 11 hereof (other than Section
11(a)(ii) hereof) shall apply only to such issuer following the first
occurrence of a Common Stock Event under this Section 13; (iv) such issuer
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
whole or fractional shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the first occurrence of any Common
Stock Event described in clauses (a), (b) or (c) of this Section 13. The
Company shall not consummate any such consolidation, merger, sale or
transfer unless (i) such issuer shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for
issuance as will permit the exercise in full of the Rights in accordance
with this Section 13, and (ii) prior thereto the Company and such issuer
shall have executed and delivered to the Rights Agent a supplemental
agreement so providing and further providing that as soon as practicable
after the date of any Common Stock Event described above in this Section 13
such issuer will (A) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (I) become effective as soon as practicable
after such filing and (II) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date, and (B) will
deliver to holders of the Rights historical financial statements of such
issuer and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
Furthermore, in case the Person which is to be party to a transaction
referred to in this Section 13 has any provision in any of its authorized
securities or in its charter or by-laws or other agreement or instrument
governing its affairs, which provision would have the effect of causing such
Person to issue, in connection with, or as a consequence of, the
consummation of a Common Stock Event described in clauses (a), (b), or (c)
of this Section 13, whole or fractional shares of Common Stock of such
Person at less than the then Current Market Price per share thereof (as
defined in Section 11(d) hereof), or to issue securities exercisable for, or
convertible into, Common Stock of such Person at less than such then Current
Market Price, then, in such event, the Company hereby agrees with each
holder of the Rights that it shall not consummate any such transaction
unless prior thereto the Company and such Person shall have executed and
delivered to the Rights Agent a supplemental agreement providing that such
provision in question shall have been canceled, waived, or amended so that
it will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or
other transfers. In the event that a Common Stock Event described in this
Section 13 shall occur at any time after the occurrence of a Common Stock
Event described in Section 11(a)(ii) hereof, the Rights which have not
therefore been exercised shall thereafter become exercisable, except as
provided in Section 7(e) hereof, in the manner described in this Section 13.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute fractions of Rights, except prior to the Distribution Date as
provided in Section 11(i) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of issuing such fractional Rights, at
the election of the Company, there shall be paid to the registered holders
of the Rights 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.
(b) The Company shall not be required to issue fractions of shares of
its capital stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares (other than, in each case with respect to
Preferred Stock or Equivalent Preferred Stock, fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock or Equivalent
Preferred Stock, as the case may be). Fractions of shares of Preferred
Stock or Equivalent Preferred Stock, as the case may be, in integral
multiples of one one-hundredth of a share of Preferred Stock or Equivalent
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the
Company and a depository selected by it, provided that such agreement shall
provide 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 Stock or the Equivalent Preferred Stock represented by such
depositary receipts. In lieu of fractional shares, at the election of the
Company, there shall be paid to the registered holders of Rights at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of a share of such capital stock.
For purposes of this Section 14(b), the current market value of a share of
such capital stock shall be the Closing Price of such capital stock for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right, by the acceptance of the Right, expressly
waives his right to receive any fractional Rights or (except as provided in
Section 14(b) hereof) any fractional share upon exercise of a Right.
Section 15. Rights of Action.
Excepting the rights of action given the Rights Agent under Section 18
hereof and except as set forth in Section 20(1) hereof, all rights of action
in respect of this Agreement are vested in the registered holder of each
Right; and any registered holder of any Right, without the consent of the
Rights Agent or of the holder of any other Right, 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 in the
manner provided in such Rights Certificate and in this Agreement, and the
Company hereby agrees to reimburse such registered holder for all expenses
(including reasonable attorneys' fees) incurred by such registered holder in
connection therewith. 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
the obligations hereunder, and shall be entitled to injunctive relief
against actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.
Section 16. Agreement of Rights Holders.
Every holder of a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied by
a proper instrument of transfer with a form of assignment and certificate
set forth on the reverse side thereof duly executed, accompanied by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request;
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Rights Certificate or, prior to the Distribution Date, the associated
Common Stock certificate, made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation; provided, however, the Company
agrees to use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends, or otherwise be deemed for any purpose the holder of any
securities of the Company which may be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote in the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to
any action by the Company, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or preemptive rights, or otherwise, until the time
specified in Section 10 hereof.
Section 18. Concerning the Rights Agent.
The Company agrees to pay to the Rights Agent such reasonable
compensation as shall be agreed to in writing between the Company and the
Rights Agent for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and disbursements 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 and all loss,
liability, damages, claims or expense, incurred without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses (including reasonable attorneys' fees and expenses) of defending
against any claim of liability for any of the foregoing.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered, or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for any number of one one-hundredths of a share
of Preferred Stock, or for shares of Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, instruction, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed and executed by the proper Person or Persons, and
verified or acknowledged as required by this Agreement.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent may be merged or with which
it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent shall be a party, or any corporation
succeeding to the shareholder services business of the 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, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement and any of the Rights
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 Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes only the duties and obligations expressly
imposed upon it by this Agreement and no implied duties or obligations shall
be read into this Agreement against the Rights Agent. The Rights Agent
shall perform its duties and obligations hereunder upon the following terms
and conditions:
(a) The Rights Agent may consult with legal counsel of its selection
(who may be legal counsel to the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) 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 (an "Officers' Certificate") signed by a person
believed by the Rights Agent to be the Chairman of the Board, the President
or any Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such Officers' 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 Officers'
Certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature on such Rights Certificate) 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 Rights 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 Rights
Certificate; nor shall it be responsible for any adjustment required under
the provisions of Sections 11 or 13 hereof or be responsible for the manner,
method or amount of any such adjustment or procedures or the ascertaining of
the existence of facts that would require any such adjustment or procedure
(except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt of a certificate delivered pursuant to Section 12
hereof, describing any such adjustment or procedures); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Stock, Common Stock or other
securities to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Common Stock, or any shares or similar units
of other securities, will, when issued, be validly authorized and issued,
fully paid, and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments 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 person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary
or the Treasurer or any Assistant Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer. Any
application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent with respect to its
duties or obligations under this Agreement and the date on and/or after
which such action shall be taken or omitted and the Rights Agent shall not
be liable for any action taken or omitted in accordance with a proposal
included in any such application on or after the date specified therein
(which date shall not be less than three Business Days after the date any
such officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking
or omitting any such action, the Rights Agent has received written
instructions from the Company in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer, or
employee of the Rights Agent may buy, sell, or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other 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, however, that reasonable
care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certification appearing on the
reverse side thereof following the form of election to purchase 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 of transfer without first consulting with the
Company.
(l) The provisions of this Section 20 are solely for the benefit of the
Rights Agent or the Company and any failure or omission under this Section
20 shall not affect the rights of the Company under this Agreement and the
Rights Agent or the Company shall have no liability to any holder of Rights
or other Person on account of such failure or omission.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of the Common Stock
by registered or certified mail, and, subsequent to the Distribution Date,
to the holders of the Rights 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, to each transfer agent of the
Common Stock by registered or certified mail, and, subsequent to the
Distribution Date, to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of 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 Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by the
Company), then the registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the
laws of the United States, the State of New York or The Commonwealth of
Massachusetts (or of any other State of the United States so long as such
corporation is authorized to do business as a banking institution in the
State of New York or The Commonwealth of Massachusetts), in good standing,
having an office designated for such purpose in the State of New York or The
Commonwealth of Massachusetts, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination
by federal or state authority and which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $50,000,000.
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; and,
except as the context herein otherwise requires, such successor Rights Agent
shall be deemed to be the "Rights Agent" for all purposes of this Agreement.
Not later than the effective date of any such appointment the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board
to reflect any adjustment or change in the Purchase Price per share and the
number or kind or class of shares of stock or other securities or property
purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance
or sale by the Company of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed necessary
or appropriate by the Board, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights evidenced by a Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Rights
would be issued, and (ii) no such Rights Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. Redemption and Termination.
The Board, by majority vote, may, at its option, at any time prior to the
Expiration Date, 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, combination of shares, or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). Immediately upon the
taking of such action ordering the redemption of all of the Rights, evidence
of which shall have been filed with the Rights Agent, and without any
further action and without any notice, the right to exercise the Rights so
redeemed will terminate and the only right thereafter of the holders of such
Rights so redeemed shall be to receive the Redemption Price (without the
payment of any interest thereon). Within 10 days after such action ordering
the redemption of all of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made.
Section 24. Exchange.
(a) The Board, by majority vote, may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall not
be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or any such Subsidiary, or any entity holding Common Stock
for or pursuant to the terms of any such plan), together with all Affiliates
of such Person, becomes the Beneficial Owner of 50% or more of the Common
Stock then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of
any Rights pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Common
Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 7(e) hereof) held by
each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preferred Stock (or shares of Equivalent
Preferred Stock) for shares of Common Stock exchangeable for Rights, at the
initial rate of one one-hundredth of a share of Preferred Stock (or share of
Equivalent Preferred Stock) for each share of Common Stock, as appropriately
adjusted to reflect adjustments in the voting rights of shares of Preferred
Stock pursuant to the terms thereof, so that the fraction of a share of
Preferred Stock delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary
to authorize additional Common Stock or Preferred Stock for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares of Common Stock, the
Company shall pay to each registered holder of a Right Certificate with
regard to which a fractional share of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this paragraph
(e), the current market value of a whole share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to Section
11(d) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
Section 25. Notice of Proposed Actions.
In case the Company shall after the Distribution Date propose (a) to pay
any dividend payable in stock of any class to the holders of its Preferred
Stock or to make any other distribution to the holders of its Preferred
Stock (other than a cash dividend out of earnings or the retained earnings
of the Company), or (b) to offer to the holders of its Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock, Common Stock or shares of stock of any class or any other
securities, rights, or options, or (c) to effect any reclassification of the
Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (d) to effect any
consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one transaction or a series of related transactions, of
more than 25% of (i) the assets of the Company and its Subsidiaries (taken
at net asset value as stated on the books of the Company and determined on a
consolidated basis in accordance with generally accepted accounting
principles consistently applied) or (ii) the earning power of the Company
and its Subsidiaries (determined on a consolidated basis in accordance with
generally accepted accounting principles consistently applied) to any other
Person or Persons, or (e) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to the
Rights Agent and each holder of a Right, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (a) or (b) above at least twenty days prior to
the record date for determining holders of the Preferred Stock for purposes
of such action, and in the case of any such other action, at least twenty
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock whichever shall be the
earlier. The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action taken
by the Company or the vote upon any such action.
In case any Common Stock Event described in Section 11(a)(ii) hereof
shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such Common Stock Event, which shall specify such event and
the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.
Notwithstanding anything in this Agreement to the contrary, prior to the
Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities
of the Company, including the Rights, for purposes of this Agreement and no
other notice need be given.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights Certificate to 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:
Oak Industries Inc.
Bay Colony Corporate Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Senior Vice President and
General Counsel
Copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Subject to the provisions of Sections 19 and 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Rights 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:
Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Boston EquiServe
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Oak Industries Inc. Rights Agreement)
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on
the registry books of the Company.
Section 27. Supplements and Amendments.
Prior to the Distribution Date, the Board, upon the vote of a majority of
the Board, may from time to time supplement or amend this Agreement without
the approval of any holders of the Rights. From and after the Distribution
Date, the Board may, upon the vote of a majority of the Board, from time to
time amend this Agreement without the approval of any holders of the Rights
in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to change any time period governing
redemption of the Rights or any other time period or (iv) to make any other
provisions in regard to matters or questions arising hereunder which the
Board, upon the vote of a majority of the Board, may deem necessary or
desirable and which shall not adversely affect the interests of the holders
of the Rights (other than any Acquiring Person or Disqualified Transferee or
any Affiliate of an Acquiring Person or Disqualified Transferee). Any
amendment made pursuant to this Section 27 after a Stock Acquisition Date
shall require the approval of a majority of the Board. The Rights Agent
shall join with the Company in the execution and delivery of any such
supplement or amendment, unless such supplement or amendment affects any of
the rights, duties, or obligations of the Rights Agent hereunder, in which
case the Rights Agent may, but shall not be required to, join in such
execution and delivery.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit
of the Company or the Rights Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board; etc.
The Board shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board, or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement and (ii) make
all determinations deemed necessary or advisable for the administration of
this Agreement. All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below all omissions
with respect to the foregoing) which are done or made by the Board of
Directors in good faith and with the concurrence of a majority of the Board
then in office shall (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties and (y)
not subject any Director to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent, and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the associated shares of
Common Stock) any legal or equitable right, remedy, or claim under this
Agreement or the Rights; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent, and the registered
holders of the Rights (and, prior to the Distribution Date, the associated
Common Stock).
Section 31. Severability.
The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision
hereof. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board determines in
its good faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated
and shall not expire until the Close of Business on the tenth day following
the date of such determination by the Board.
Section 32. Governing Law.
This Agreement and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and for
all purposes shall be governed by and construed in accordance with the laws
of said State applicable to contracts to be made and performed entirely
within said State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and set their respective hands and seals, all as of the day
and year first above written.
OAK INDUSTRIES INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
President
Attest:
By:/s/ ▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇
Assistant Secretary
BANK OF BOSTON, AS RIGHTS AGENT
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇-▇▇▇▇▇▇▇
Title: Administration Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF JUNIOR
PREFERRED STOCK
of
OAK INDUSTRIES INC.
Pursuant to Section 151 of the
Delaware General Corporation
OAK INDUSTRIES INC., a corporation organized and existing under and by
virtue of The General Corporation Law of the State of Delaware (the
"Corporation") DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors (the
"Board of Directors") by the Restated Certificate of Incorporation of the
Corporation, as amended, and in accordance with the provisions of Section
151 of the General Corporation Law of the State of Delaware, the Board of
Directors on December 7, 1995 adopted a resolution providing for the
authorization of a series of Preferred Stock, as follows:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Restated
Certificate of Incorporation, as amended, a series of preferred stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Junior Preferred Stock" (the "Junior Stock") and the number
of shares constituting such series shall be 500,000. The number of shares
of Junior Stock may be increased or decreased by a resolution duly adopted
by the Board of Directors, but may not be decreased below the number of
shares of Junior Stock then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon conversion of any outstanding securities convertible into Junior Stock.
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 Junior Stock with respect to dividends, the holders of shares of
Junior Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last 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 Junior Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (i) $1.00 or (ii) subject to the provision for
adjustment set forth in Section 8 hereof, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $.01 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 Junior
Stock.
(b) The Corporation shall declare a dividend or distribution on the
Junior Stock as provided in paragraph (a) of this Section 2 immediately
after it declares a dividend or distribution on the Common Stock (other than
a dividend payable in shares of or subdivision with respect to Common
Stock); provided, however, that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Junior
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Stock from the quarterly Dividend Payment Date next
preceding the date of issue of such shares of Junior Stock, unless the date
of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior 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 Junior
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares
of Junior Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to
the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Junior Stock shall have
the following voting rights:
(a) Subject to the provision for adjustment set forth in Section 8
hereof, each share of Junior Stock shall entitle the holder thereof to one
hundred votes on all matters submitted to a vote of the stockholders of the
Corporation.
(b) Except as otherwise provided herein or by law, the holders of
shares of Junior Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(c) Except as set forth herein, holders of Junior Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Junior 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 Junior 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 Junior Stock, except
dividends paid ratably on the Junior 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 junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior 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 Junior Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Junior Stock, or any shares of stock ranking on a parity with
the Junior Stock, except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any 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 4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. Reacquired Shares. Any shares of Junior 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.
Section 6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders
of shares of Common Stock or any other stock of the Corporation ranking
junior (upon liquidation, dissolution or winding up) to the Junior Stock
unless, prior thereto, the holders of shares of Junior Stock shall have
received $100.00 per share plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Junior Liquidation Preference"). Following the payment
of the full amount of the Junior Liquidation Preference, no additional
distributions shall be made to the holders of shares of Junior Stock unless,
prior thereto, the holders of shares of Common Stock (which term shall
include, for the purposes only of this Section 6, any series of the
Corporation's Preferred Stock ranking on a parity with the Common Stock upon
liquidation, dissolution or winding up) shall have received an amount per
share (the "Common Adjustment") equal to the quotient obtained by dividing
(i) the Junior Liquidation Preference by (ii) 100 (as appropriately adjusted
as set forth in Section 8 hereof 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"). In the event, however,
that there are not sufficient assets available to permit payment in full of
the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock. Following the payment of the full
amount of the Junior Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Junior Stock and Common Stock,
respectively, holders of Junior Stock and holders of shares of Common Stock
shall receive their ratable and proportionate share of the remaining assets
to be distributed in the ratio of the Adjustment Number to one (1) with
respect to such Junior Stock and Common Stock, on a per share basis,
respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Junior Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Junior Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences.
(c) None of the merger or consolidation of the Corporation into or
with any other company, the sale of all or substantially all of the property
and assets of the Corporation or the distribution to the stockholders of the
Corporation of all or substantially all of the consideration for such sale,
unless such consideration (apart from the assumption of liabilities) or the
net proceeds thereof consists substantially entirely of cash, shall be
deemed to be a liquidation, dissolution or winding up within the meaning of
this Section 6.
(d) Each share of Junior Stock shall stand on a parity with each
other share of Junior Stock or any other series of the same class of
preferred stock upon voluntary or involuntary liquidation, dissolution or
distribution of assets or winding up of the Corporation.
Section 7. Consolidation, Merger, etc. In case 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 Junior Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment set
forth in Section 8 hereof) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged.
Section 8. Certain Adjustments. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then, in each such case, the amounts set
forth in Sections 2(a), 3(a), 6(a) and 7 hereof with respect to the multiple
of (i) cash and non-cash dividends, (ii) votes, (iii) the Junior Liquidation
Preference and (iv) an aggregate amount of stock, securities, cash and/or
other property referred to in Section 7 hereof, 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 9. Ranking. The Junior Stock shall rank pari passu with (or if
determined by the Board of Directors in any vote establishing any other
series of Preferred Stock, either senior and prior in preference to, or
junior and subordinate to, as the case may be) other series of Preferred
Stock of the Corporation with respect to dividends and/or preference upon
liquidation, dissolution or winding up.
Section 10. Redemption. The shares of Junior Stock may be purchased by
the Corporation at such times and on such terms as may be agreed to between
the Corporation and the selling stockholder, subject to any limitations
which may be imposed by law or the Restated Certificate of Incorporation, as
amended.
Section 11. Amendment. The Restated Certificate of Incorporation of the
Corporation, as amended, shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Junior Stock so as to affect them adversely without the affirmative vote of
the holders of two-thirds or more of the outstanding shares of Junior Stock,
voting together as a single class.
Section 12. Fractional Shares. Junior 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
Junior Stock.
IN WITNESS WHEREOF, this Certificate of Designation was executed on
behalf of the Corporation by its President and attested by its Secretary on
December __, 1995.
By
--------------------
President
Attest:
By
------------------
Secretary
[SEAL]
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- Rights
-----
NOT EXERCISABLE AFTER DECEMBER 7, 2005 OR EARLIER IF ORDER OF REDEMPTION
IS GIVEN. 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 OR AN AFFILIATE (WHICH INCLUDES AFFILIATES AND ASSOCIATES) OF AN
ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. THE RIGHTS
SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN
ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH
HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION
SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED BY
THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES AND
ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF THE RIGHTS AGREEMENT.] (1)
(1) The portion of the legend in brackets shall be inserted only if
applicable.
Rights Certificate
OAK INDUSTRIES INC.
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions, and conditions
of the Rights Agreement dated as of December 7, 1995 (the "Rights
Agreement") between Oak Industries Inc. (the "Company"), and Bank of Boston
(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. (Boston, Massachusetts time) on December 7, 2005 (the
"Expiration Date") at the office of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-hundredth of a share of
the Junior Preferred Stock, with a par value of $.01 per share ("Preferred
Stock"), of the Company per each Right represented hereby, at a purchase
price of $125 per share (the "Purchase Price") upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase
set forth on the reverse side hereof and the certificate contained therein
duly executed, accompanied by a signature guarantee and such other
documentation as the Rights Agent may reasonably request. The number of
Rights evidenced by this Rights Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of
December 18, 1995, based on the shares of Common Stock of the Company as
constituted at such date.
As more fully set forth in the Rights Agreement, upon the occurrence of a
Common Stock Event (as such term is defined in the Rights Agreement), if the
Rights evidenced by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate of an Acquiring Person (as each such term
is defined in the Rights Agreement) or (ii) a Disqualified Transferee (as
defined in the Rights Agreement), such Rights shall automatically become
null and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Common Stock Event.
The Rights evidenced by this Rights Certificate shall not be exercisable,
and shall be void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by
such holder, of the Rights in such jurisdiction shall not have been obtained
or be obtainable.
As provided in the Rights Agreement, the Purchase Price and the number of
whole or fractional shares of Preferred Stock which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events.
In the circumstances described in Section 13 of the Rights Agreement, the
securities issuable upon the exercise of the Rights evidenced hereby shall
be the common stock or similar equity securities or equity interests of an
entity other than the Company.
This Rights 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 Rights
Certificates, which limitations of rights include the temporary suspension
of the exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on file
at the office of the Rights Agent designated for such purpose and may be
obtained by the holder of any Rights upon written request to the Rights
Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent, accompanied by a signature
guarantee and such other documentation as the Rights Agent designated for
such purpose may reasonably request, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of whole or
fractional shares of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised in part,
the holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company by a majority vote of the
Board (as defined in the Rights Agreement) then in office at any time prior
to the Expiration Date, at a redemption price of $.01 per Right (which
amount is subject to adjustment as provided in the Rights Agreement).
The Company is not obligated to issue whole or fractional shares of
Preferred Stock (or other securities) upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof a cash payment may be made at
the election of the Company, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any action by the
Company, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided
in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature and seal of the proper officers of the
Company. Dated as of December __, 1995.
OAK INDUSTRIES INC.
By
Title:
ATTEST:
Title:
Countersigned:
By
Authorized Signatory
Date of Countersignature:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED hereby sells, assigns and
transfers unto (Please print name and address of
transferee)
whose social security or tax identification number, is:
the Rights evidenced by this Rights Certificate, together with all
right, title and interest herein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of
substitution.
Dated:
----------------
Signature
Signature Guaranteed: (2)
(2) Signature must be guaranteed by a member firm of the New York Stock
Exchange, Inc. or a commercial bank or trust company having an office or
correspondent in New York City.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate of an Acquiring Person (as each such term is defined in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate of an Acquiring Person.
Dated: -----------------------
Signature
Signature Guaranteed:*
-------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right
Certificate)
To Oak Industries Inc.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the number of one one-
hundredths of a share of Preferred Stock (or other securities) issuable upon
the exercise of such Rights and requests that certificates for such shares
be issued in the name of:
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
Rights Certificate, a new Rights Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated:
---------------------
Signature
(Signature must conform in all respects to name of holder as
specified on the face of this Rights Certificate)
Signature Guaranteed: (3)
(3) Signature must be guaranteed by a a member firm of the New York Stock
Exchange, Inc. or a commercial bank or trust company having an office or
correspondent in New York City.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate of any such Acquiring Person (as each such term is
defined in 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 Rights Certificate
after the occurrence of a Common Stock Event (as such term is defined in the
Rights Agreement) from any Person who is, was, or became an Acquiring Person
or an Affiliate of an Acquiring Person.
Dated: ---------------------
Signature
Signature Guaranteed: (4)
--------------------------
(4) Signature must be guaranteed by a member firm of the New York Stock
Exchange, Inc. or a commercial bank or trust company having having an office
or correspondent in New York City.
EXHIBIT C
OAK INDUSTRIES INC.
SUMMARY OF PURCHASE RIGHTS
On December 7, 1995, the Board of Directors (the "Board") of Oak
Industries Inc. (the "Company") declared a dividend of one purchase right (a
"Right") for every outstanding share of the Company's common stock, $.01 par
value (the "Common Stock"). The Rights were distributed on December 18,
1995 to stockholders of record as of the close of business on that date (the
"Dividend Record Date"). The terms of the Rights are set forth in a Rights
Agreement dated as of December 7, 1995 (the "Rights Agreement") between the
Company and Bank of Boston (the "Rights Agent"). The Rights Agreement
provides for the issuance of one Right for every share of Common Stock
issued and outstanding on the Dividend Record Date and for each share of
Common Stock which is issued or sold after that date and prior to the
"Distribution Date" (as defined below).
Each Right entitles the holder to purchase from the Company one one-
hundredth of a share of Junior Preferred Stock at a price of $125 per one
one-hundredth of a share, subject to adjustment. The Rights will expire on
December 7, 2005 (the "Expiration Date"), or the earlier redemption of the
Rights, and are not exercisable until the Distribution Date.
No separate Rights certificates will be issued at the present time.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the Common Stock certificates
and will be transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Dividend Record Date
upon transfer or new issuance of the Company's Common Stock will contain a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any of the Company's Common Stock certificates
will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
The Rights will separate from the Common Stock and Rights certificates
will be issued on the Distribution Date. Unless otherwise determined by a
majority of the Board then in office, the Distribution Date will occur on
the earlier of (i) the fifteenth business day following the later of the
date of a public announcement that a person, including affiliates or
associates of such person (an "Acquiring Person"), except as described
below, has acquired or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock or the date on
which an executive officer of the Company has actual knowledge that an
Acquiring Person became such (the "Stock Acquisition Date") or (ii) the
fifteenth business day following commencement of a tender offer or exchange
offer that would result in any person or its affiliates and associates
owning 20% or more of the Company's outstanding Common Stock. In any event,
the Board of Directors may delay the distribution of the certificates.
After the Distribution Date, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of the Company's
Common Stock as of the close of business on the Distribution Date and such
separate Rights Certificates alone will evidence the Rights.
If, at any time after December 7, 1995, any person or group of affiliated
or associated persons (other than the Company and its affiliates) shall
become an Acquiring Person, each holder of a Right will have the right to
receive shares of the Company's Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a market value of
two times the exercise price of the Right. If the exercise price is $125,
the holder of each Right would be entitled to receive $250 in market value
of the Company's Common Stock for $125. Also, in the event that the Company
were acquired in a merger or other business combination, or more than 25% of
its assets or earning power were sold (each, a "Common Stock Event"), each
holder of a Right would have the right to exercise such Right and thereby
receive common stock of the acquiring company with a market value of two
times the exercise price of the Right. For example, if the exercise price
is $125, the holder of each Right would be entitled to receive $250 in
market value of the acquiring company's common shares (e.g., two shares if
the per share market value is $125, for $125). Following the occurrence of
any of the events described in this paragraph, any Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person shall immediately become null and
void.
The Board may, at its option, at any time after any person becomes an
Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date of
declaration of the Rights (such exchange ratio being hereinafter referred to
as the "Exchange Ratio"). The Board, however, may not effect 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 any such subsidiary or
any entity holding Common Stock for or pursuant to the terms of any such
plan), together with all affiliates of such person, becomes the beneficial
owner of 50% or more of the Common Stock then outstanding. Immediately upon
the action of the Board ordering the exchange of any Rights and without any
further action and without any notice, the right to exercise such Rights
will terminate and the only right thereafter of a holder of such Rights will
be to receive that number of shares of Common Stock equal to the number of
such Rights held by the holder multiplied by the Exchange Ratio.
The exercise price of the Rights, and the number of one one-hundredth of
a share of Junior Preferred Stock or other securities or property issuable
upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Stock, (ii) upon the grant
to holders of the Preferred Stock of certain rights or warrants to subscribe
for shares of the Preferred Stock or convertible securities at less than the
current market price of the Preferred Stock or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding cash dividends paid out of the earnings or retained earnings of
the Company and certain other distributions) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustments in the exercise price of the
Rights will be required until cumulative adjustments equal at least 1% in
such price.
At any time prior to the Expiration Date, the Company, by a majority vote
of the Board, may redeem the Rights at a redemption price of $.01 per Right
(the "Redemption Price"), as described in the Rights Agreement. Immediately
upon the action of the Board electing to redeem the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Neither the distribution of the Rights nor the subsequent separation of
the Rights on the Distribution Date will be a taxable event for the Company
or its stockholders. Holders of Rights may, depending upon the
circumstances, recognize taxable income upon the occurrence of a Common
Stock Event. In addition, holders of Rights may have taxable income as a
result of (i) an exchange by the Company of shares of Common Stock for
Rights as described above or (ii) certain anti-dilution adjustments made to
the terms of the Rights after the Distribution Date. A redemption of the
Rights would be a taxable event to holders.
The Rights Agreement may be amended by the Board at any time prior to the
Distribution Date without the approval of the holders of the Rights. From
and after the Distribution Date, the Rights Agreement may be amended by the
Board without the approval of the holders of the Rights in order to cure any
ambiguity, to correct any defective or inconsistent provisions, to change
any time period for redemption or any other time period under the Rights
Agreement or to make any other changes that do not adversely affect the
interests of the holders of the Rights (other than any Acquiring Person or
its affiliates, associates or transferees).
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to the Company's Form 8-A. A copy of the
Rights Agreement is available free of charge from the Rights Agent, at the
following address:
Boston EquiServe
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Shareholder Services Division
(Oak Industries Inc. Rights Agreement)
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.