FOURTH AMENDED AND RESTATED RIGHTS AGREEMENT
EXHIBIT 4
FOURTH
AMENDED AND RESTATED RIGHTS AGREEMENT
Whereas,
Caterpillar Inc., a Delaware corporation (the "Company"), and Mellon
Investor Services LLC, a New Jersey limited liability company (the "Rights
Agent") entered into an
Amended and Restated Rights Agreement dated September 27, 2001; and
Whereas, the
Company and the Rights Agent entered into a Second Amended and Restated Rights
Agreement dated October 18, 2002 which added a provision for a required review
at least every three years of the continued appropriateness of the Rights
Agreement by a TIDE Committee composed entirely of independent outside
Directors; and
Whereas, the
Company and the Rights Agent entered into a Third Amended and Restated Rights
Agreement dated June 12, 2003 which updated the legend language contained in
Section 3(c) of the Rights Agreement; and
Whereas, the
Company and the Rights Agent wish to accelerate the final termination date of
the Rights Agreement by executing this Fourth Amended and Restated Rights
Agreement dated June 17, 2005; and
Whereas, the Board
of Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding at the close of
business on December 23, 1996 (the "Record
Date"), each Right
representing the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions set forth,
and has further authorized and directed the issuance of one Right with respect
to each Common Share that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be
issued with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date in accordance with the provisions of Section 21 of this
Agreement;
Now, therefore, the
parties 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 and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the then outstanding Common
Shares. Notwithstanding the foregoing, (A) the term "Acquiring Person" 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
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan, or (v) any Person, who or which together with all
Affiliates and Associates of such Person becomes the Beneficial Owner of 15% or
more of the outstanding Common Shares because of the acquisition of Common
Shares directly from the Company, and (B) no Person shall be deemed to be an
"Acquiring Person" either (X) as a result of the acquisition of Common Shares by
the Company which, by reducing the number of Common Shares outstanding,
increases the proportional number of shares beneficially owned by such Person
together with all Affiliates and Associates of such Person; except that if (i) a
Person would become an Acquiring Person (but for the operation of this subclause
X) as a result of the acquisition of Common Shares by the Company, and (ii)
after such share acquisition by the Company, such Person, or an Affiliate or
Associate of such Person, becomes the Beneficial Owner of any additional Common
Shares, then such Person shall be deemed an Acquiring Person, or (Y) if (i)
within 8 days after such Person would otherwise have become an Acquiring Person
(but for the operation of this subclause Y), such Person notifies the Board of
Directors that such Person did so inadvertently and (ii) within 2 days after
such notification, such Person is the Beneficial Owner of less than 15% of the
outstanding Common Shares.
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(b) "Act" shall mean the Securities Act of 1933, as amended and as in effect on the date of this Agreement.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement (the "Exchange
Act").
(d) A
Person shall be the "Beneficial
Owner" of any
securities:
(i) which
such Person or any of such Person's Affiliates or Associates beneficially owns,
directly or indirectly;
(ii) which
such Person or any of such Person's Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided,
however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided,
however, that a Person
shall not be deemed the Beneficial Owner of any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with Exchange Act rules
and (2) is not then reportable on Schedule 13D under the Exchange Act;
or
(iii) which
are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any such Person's
Affiliates or Associates) has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) relating to
the acquisition, holding, voting (except to the extent contemplated by the
proviso to Section 1(d)(ii)(B)) or disposing of any securities of the
Company.
(e) "Business
Day" shall mean any day
other than a Saturday, Sunday or U.S. federal holiday.
(f) "Close of
business" on any given date
shall mean 5:00 P.M., New York time, on such date; provided,
however, that if such date
is not a Business Day it shall mean 5:00 P.M., New York time, on the next
succeeding Business Day.
(g) "Common
Shares" when used with
reference to the Company shall mean the shares of Common Stock, par value $1.00
per share, of the Company or, in the event of a subdivision, combination or
consolidation with respect to such shares of Common Stock, the shares of Common
Stock resulting from such subdivision, combination or consolidation.
"Common
Shares" when used with
reference to any Person other than the Company shall mean the capital stock (or
equity interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(h) "Distribution
Date" shall have the
meaning set forth in Section 3.
(i) "Final
Expiration Date" shall have the
meaning set forth in Section 7.
(j) "Interested
Stockholder" shall mean any
Acquiring Person or any Affiliate or Associate of any Acquiring Person or any
other Person in which any such Acquiring Person, Affiliate or Associate has an
interest, or any other Person acting directly or indirectly on behalf of or in
concert with an Acquiring Person, Affiliate or Associate.
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(k) "Person" shall mean any
individual, firm, partnership, corporation, limited liability company, trust,
association, joint venture or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(l) "Preferred
Shares" shall mean shares
of Series A Junior Participating Preferred Stock, with a par value of $1.00 per
share of the Company having the relative rights, preferences and limitations set
forth in the Certificate of Designation dated November 14, 1986, applicable to
such Series A Junior Participating Preferred Stock.
(m) "Redemption
Date" shall have the
meaning set forth in Section 7.
(n) "Section
11(a)(ii) Event" shall mean any
event described in Section 11(a)(ii).
(o) "Section 13
Event" shall mean any
event described in clause (a), (b) or (c) of Section 13.
(p) "Shares
Acquisition Date" shall mean the
first date of public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(q) "Subsidiary" of any Person
shall mean any Company or other Person of which a majority of the voting power
of the voting equity securities or equity interest is owned, directly or
indirectly, by such Person.
(r) "Triggering
Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
Section 2.
Appointment
of Rights Agent.
The Company
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent accepts such
appointment.
Section 3.
Issuance
of Right Certificates.
(a) Until
the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the
tenth day (or such later date as may be determined by action of the Company's
Board of Directors) after the date of commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
company, any Subsidiary of the Company or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan) of, or of the first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan) to commence a tender or exchange offer the consummation of
which would result in any Person becoming an Acquiring Person (including, in the
case of both (i) and (ii), any such date which is after the date of this
Agreement and prior to the issuance of the Rights), the earlier of such dates
being herein referred to as the "Distribution
Date," (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of holders thereof (which
certificates shall also be deemed to be Right Certificates) and not be separate
Right Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of the underlying Common
Shares (including a transfer to the Company). As soon as practicable after the
Distribution Date, the Company will promptly notify the Rights Agent thereof,
and prepare and execute, the Rights Agent will countersign, and the Company will
send to each record holder of Common Shares as of the close of business on the
Distribution Date a Right Certificate, substantially in the form of Exhibit A (a
"Right
Certificate"), evidencing one
Right for each Common Share so held. As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
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(b) Promptly
following the Record Date, the Company will send a copy of a Summary of Rights
to Purchase Preferred Shares in the form of Exhibit B (the "Summary of
Rights") to each record
holder of Common Shares as of the close of business on the Record Date. With
respect to certificates for Common Shares outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of holders thereof together with a copy of the Summary
of Rights. Until the Distribution Date (or the earlier of the Redemption Dates
or the Final Expiration Date), the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of Rights associated with
Common Shares.
(c) Certificates
for Common Shares which become outstanding after the Record Date but prior to
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date, shall be deemed also to be certificates for Rights, and shall
bear the following legend:
This certificate
evidences and entitles the holder to certain rights set forth in a Amended and
Restated Rights Agreement between Caterpillar Inc. and Mellon Investor Services
LLC, as amended and restated from time to time (the "Rights
Agreement"), the terms of
which are incorporated by reference and a copy of which is on file at the
principal executive offices of Caterpillar Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Caterpillar
Inc. will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request for it. Under certain
circumstances, Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) and certain related persons, whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and
void.
With respect to
such certificates containing the foregoing legend, until the Distribution Date,
the Rights associated with the Common Shares represented by such certificates
shall be evidenced by such certificates alone, and the surrender for transfer of
any such certificate shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby. In the event that the Company
purchases or acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Shares which are no longer
outstanding.
Section 4.
Form of
Right Certificate.
The Right
Certificates shall be in the form of Exhibit A and may have such marks, legends,
summaries or endorsements as the Company may deem appropriate (but which do not
affect the rights, duties or responsibilities of the Rights Agent). The Right
Certificates shall entitle the holders to purchase such number of one-hundredths
of a Preferred Share set forth at the price per one one-hundredth of a Preferred
Share set forth (the "Purchase
Price"), but the amount
and type of securities purchasable upon the exercise of each Right and the
Purchase Price shall be subject to adjustment as provided.
Section 5.
Countersignature
and Registration.
(a) The
Right Certificates shall be executed on behalf of the Company by its Chairman,
any Group President, or any of its Vice Presidents, shall have affixed the
Company's seal and shall be attested by the Secretary or an Assistant Secretary
of the Company. The Right Certificates shall be countersigned by the Rights
Agent and shall not be valid unless countersigned.
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(b) Following
the Distribution Date and receipt by the Rights Agent of all necessary
information, the Rights Agent will keep books for registration and transfer of
the Right Certificates. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates and the certificate number and the
date of each of the Right Certificates.
Section 6.
Transfer,
Split-Up, Combination and Exchange of Right Certificates, Mutilated, Destroyed,
Lost or Stolen Right Certificate.
(a) Subject
to the provisions of Section 14, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the earlier of
the Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredth of a Preferred Share as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificates shall make such request in writing to the Rights
Agent, and shall surrender the Right Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose. The Company may require payment sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates. The Rights Agent shall have
no duty or obligation to take any action under any Section of this Agreement
which requires the payment by a Rights holder of applicable taxes and
governmental charges unless and until the Rights Agent is satisfied that all
such taxes and/or charges have been paid.
(b) Upon
receipt by the Company and the Rights Agent of evidence satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security satisfactory to them,
and, at the Company's or the Rights Agent's request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate to the
Rights Agent for countersignature and delivery.
Section 7.
Exercise
of Rights; Purchase Price; Expiration Date of Rights.
(a) The
registered holder of any Right Certificate may exercise the Rights in whole or
in part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase and the certificate duly
executed, to the Rights Agent with payment of the Purchase Price for each one
one-hundredth of a Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on June 30, 2005 (the
"Final
Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 22 (the "Redemption
Date"), or (iii) the
time at which such Rights are exchanged as provided in Section 23.
(b) The
Purchase Price for each one one-hundredth of a Preferred Share pursuant to the
exercise of a Right shall initially be $300, subject to adjustment as provided.
In the event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, each Common Share outstanding following such subdivision, combination or
consolidation shall continue to have a Right associated with it and the Purchase
Price following any such event shall be proportionately adjusted to equal the
result obtained by multiplying the Purchase Price immediately prior to such
event by a fraction the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the event and the denominator of which
shall be the total number of Common Shares outstanding immediately following the
event.
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(c) Upon
receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase and the certificate duly executed, accompanied by payment
of the Purchase Price for the Preferred Shares and an amount equal to any
applicable tax or charge required to be paid by the holder, the Rights Agent
shall promptly (i) (A) requisition certificates for the number of Preferred
Shares to be purchased or (B) requisition depositary receipts representing such
number of one one-hundredth of a Preferred Share to be purchased, (ii) when
necessary to comply with this Agreement, requisition from the Company the amount
of cash to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by the
holder, and (iv) when necessary to comply with this Agreement, after receipt
thereof, deliver such cash to or upon the order of the registered holder of such
Right Certificate.
(d) In
case the registered holder of any Right Certificate shall exercise less than all
the Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Sections 6 and 14
hereof.
Section 8.
Cancellation
and Destruction of Right Certificates.
All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Company otherwise than
upon exercise. The Rights Agent shall deliver all canceled Right Certificates to
the Company, or shall, at the written request of the Company, destroy canceled
Right Certificates and deliver a certificate of destruction to the
Company.
Section 9.
Reservation
and Availability of Preferred Shares.
(a) The
Company agrees that prior to a Section 11(a)(ii) Event it will reserve out of
its authorized and unissued Preferred Shares, or any authorized and issued
Preferred Shares held in its treasury, the number of Preferred Shares sufficient
to permit exercise in full of all outstanding Rights and, after the occurrence
of a Section 11(a)(ii) Event, shall, to the extent reasonably practicable, so
reserve a sufficient number of Common Shares (and/or other securities) which may
be required to permit exercise in full of Rights pursuant to this
Agreement.
(b) The
Company agrees that it will pay any taxes and governmental charges which may be
payable for the issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. The Company shall not, however, be
required to pay any tax or charge which may be payable for any transfer or
delivery of Right Certificates to a person other than, or the issuance or
delivery of certificates of depository receipts for the Preferred Shares in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or to deliver any
certificates or depositary receipts for Preferred Shares upon the exercise of
any Rights, until any such tax or charge shall have been paid or until it has
been established to the Company's satisfaction that no tax or charge is
due.
Section 10.
Preferred
Shares Record Date.
Each person in
whose name any certificate for Preferred Shares is issued upon the exercise of
Rights shall be the holder of record of the Preferred Shares represented, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes and charges) was made; provided,
however, that, if the date
of such surrender and payment is a date upon which the Preferred Shares transfer
books of the Company are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the
Company are open. Prior to exercise of the Rights, the holder of a Right
Certificate shall not be entitled to any rights of a holder of Preferred Shares
for which the Rights shall be exercisable.
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Section 11.
Adjustment
of Purchase Price, Number and Kind of Shares or Number of
Rights.
The Purchase Price,
the number and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment as provided in this Section.
(a) (i) If
the Company shall at any time after the date of this Agreement (A) declare a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into
a smaller number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving Company), except as otherwise provided in
this Section, the Purchase Price in effect at the time of such event, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided,
however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right.
(ii) In
the event any Person, alone or together with its Affiliates and Associates,
shall become an Acquiring Person, then each holder of a Right shall have a right
to receive, upon exercise thereof at a price equal to the then current Purchase
Price such number of Common Shares as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and
dividing that product by (y) 50% of the then current per share market price of
the Company's Common Shares on the date of such first occurrence;
(iii) After
the occurrence of such event, any Rights that were acquired or beneficially
owned by an Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be void and any holder of such Rights shall have no right to
exercise the Rights under any provision of this Agreement. No Right Certificate
shall be issued pursuant to Section 3 that represents Rights beneficially owned
by an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence shall be canceled.
(iv) If
there shall not be sufficient treasury shares or authorized but unissued (and
unreserved) Common Shares to permit the exercise in full of the Rights, the
Company shall take all such action as may be necessary to authorize additional
Common Shares. If the Company is unable to authorize additional Common Shares,
the Company shall substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Preferred Shares or fraction
thereof such that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current per share market
price of one Common Share as of the date of issuance of such Preferred Shares or
fraction thereof.
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(b) In
case the Company shall fix a record date for the issuance of rights (other than
the Rights), options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price per
share, if a security convertible into Preferred Shares or equivalent preferred
shares) less than the then current per share market price of the Preferred
Shares (as determined pursuant to Section 11(d) hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current per share market price, and the denominator of which shall be
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided,
however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In
case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving Company) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the 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 then current per
share market price (as determined pursuant to Section 11(d) hereof) of the
Preferred Shares on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided,
however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been
fixed.
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(d) (i) For
the purpose of any computation hereunder, the "current per
share market price" of any security (a
"Security" for the purpose of
this Section 11(d)(i)) shall be the average of the daily closing prices per
share of such Security for thirty (30) consecutive Trading Days immediately
prior to but not including such date; provided,
however, that in the event
that the current per share market price of the Security is determined during a
period following the announcement of (A) a dividend or distribution payable in
shares of such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior to the
expiration of thirty (30) Trading Days after but not including the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, or,
in case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on principal national securities exchange on which the Security is listed
or admitted to trading or, if the Security is not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so quoted
, the average of the high bid and low asked prices in the over-the-counter
market as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Security is not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security selected by the
Board of Directors of the Company. If on any such date no such market marker is
making market in the Security, the fair value of the Security on such date as
determined in good faith by the Board of Directors of the Company shall be used.
The term "Trading
Day" shall mean a day
on which the principal national securities exchange on which the Security is
listed or admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For
the purpose of any computation hereunder, the "current per
share market price" of the Preferred
Shares shall be determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the "current per
share market price" of the Preferred Shares shall be conclusively deemed to be
the current per share market price of the Common Shares as determined pursuant
to Section 11(d)(i), (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof), multiplied by
100. If neither the Common Shares nor the Preferred Shares are publicly held or
so listed or traded, "current per share market price" shall mean the fair value
per share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent.
(e) No
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price;
provided,
however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one one-millionth of a Preferred Share or one ten-thousandth of any
other share or security as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment or (ii) the Final Expiration
Date.
(f) If
as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13,
the holder of any Right exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares, thereafter the number
of other shares so receivable upon exercise of any Right shall be subject to
adjustment.
(g) All
Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price shall evidence the right to purchase at the adjusted Purchase
Price, the number of one one-hundredths of a Preferred Share purchasable upon
exercise of the Rights, all subject to further adjustment as
provided.
9
(h) The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in lieu of any adjustment in the number of one
one-hundredths of a Preferred Share purchasable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made, and shall promptly give the Rights Agent a copy of such
announcement. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been issued,
shall be at least ten (10) days later than the date of the public announcement.
If Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(h), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing the additional Rights to which
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates distributed shall be
issued, executed and countersigned in the manner provided and shall be
registered in the names of the holders of record as specified in the public
announcement.
(i) Right
Certificates thereafter issued may continue to express the Purchase Price and
the number of one one-hundredths of a Preferred Share which were expressed in
the initial Right Certificates.
(j) Before
taking any action that would cause an adjustment reducing the Purchase Price
below par value, if any, of the number of one one-hundredths of a Preferred
Share, Common Shares or other securities issuable upon exercise of the Rights,
the Company shall take any corporate action necessary for the Company to validly
issue such number of fully paid and nonassessable one one-hundredths of a
Preferred Share, Common Shares or other securities at such adjusted Purchase
Price.
(k) If
Section 11 requires an adjustment in the Purchase Price effective as of a record
date for a specified event, the Company may defer (and shall give prompt written
notice of such election to the Rights Agent) until the occurrence of such event
the issuance to the holder of any Right exercised after such record date the
Preferred Shares, Common Shares or other securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares, Common Shares
or other securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company
shall deliver to such holder a due ▇▇▇▇ or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring adjustment.
(l) The
Company may make reductions in the Purchase Price so that (i) any consolidation
or subdivision of the Preferred Shares, (ii) issuance wholly for cash of
Preferred Shares at less than the current market price, (iii) issuance wholly
for cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this Section 11, made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
Section 12.
Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever an
adjustment is made as provided in Sections 11 or 13, the Company shall promptly
(a) prepare a certificate setting forth the adjustment and a brief statement of
the facts and computations accounting for such adjustment, (b) file with the
Rights Agent a copy of such certificate and (c) mail a brief summary to each
holder of a Right Certificate. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment contained therein and
shall not be deemed to have knowledge of such adjustment unless and until it
shall have received such certificate.
10
Section 13.
Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.
In
the event, at any time after a Person has become an Acquiring Person, (a) the
Company shall consolidate with, or merge with and into, any other Person (b) any
Person shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving Company of such merger and,
in connection with such merger, all or part of the Common Shares shall be
exchanged for 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 or
more transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries to any other Person other
than the Company or one or more of its wholly-owned Subsidiaries, then (i) each
holder of a right shall have the right to receive, in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving Company) as shall equal the result
obtained by (A) multiplying the current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price of
the Common Shares of such other Person (determined pursuant to Section 11 (d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
in relation to the Common Shares thereafter deliverable upon the exercise of the
Rights. The Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such issuer shall have executed
and delivered to the Rights Agent a supplemental agreement so providing. The
Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
Section 14.
Fractional
Rights and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no market maker is making a market in the
Rights, the fair value of the Rights on such a date as determined in good faith
by the Board of Directors of the Company shall be used.
11
(b) The
Company shall not be required to issue fractions of Preferred Shares (other than
fractions which are one one-hundredth or integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are one
one-hundredth or integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided that such
agreement shall provide that the holders of such depositary receipts shall have
the rights, privileges and preferences to which they are entitled as beneficial
owners of the Preferred Shares represented by such depositary receipts. In lieu
of fractional Preferred Shares that are not one one-hundredth or integral
multiples of one one-hundredth of a Preferred Share, the Company shall pay to
the registered holders of Right Certificates an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For the purposes of
this Section 14(b), the current market value of one Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of
exercise.
(c) Following
occurrence of one of the transactions or events specified in Section 11 giving
rise to the right to receive Common Shares, capital stock equivalents (other
than Preferred Shares) or other securities upon the exercise of a Right, the
Company shall not be required to issue fractions of shares or units of such
Common Shares, capital stock equivalents or other securities upon exercise of
the Rights or to distribute certificates which evidence fractions of such Common
Shares, capital stock, equivalents or other securities. In lieu of fractional
shares or units of such Common Shares, capital stock equivalents or other
securities, the Company may pay to the registered holders of Right Certificates
at the time such Rights are exercised an amount in cash equal to the same
fraction of the current market value of a share or unit of such Common Shares,
capital stock equivalents or other securities. For purposes of this Section
14(c), the current market value shall be determined in the manner set forth in
Section 11(d) for the Trading Day immediately prior to the date of exercise and,
if such capital stock equivalent is not traded, each capital stock equivalent
shall have the value of one one-hundredth of a Preferred Share.
(d) The
Rights Agent shall have no duty or obligation with respect to this
Section 14 or any other Section hereof concerning fractional shares unless
and until it has received specific instructions (and sufficient cash, if
required) from the Company with respect to its duties and obligations under such
Sections.
Section 15.
Agreement
of Right Holders.
Every holder of a
Right agrees that:
(a) prior
to the Distribution Date, the Rights will be transferable only in connection
with the transfer of the Common Shares;
(b) after
the Distribution Date, the Right Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the office of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate form fully
executed;
(c) the
Company and the Rights Agent may treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby; and
12
(d) neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or a beneficial interest in 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 must
use its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 16.
Right
Certificate Holder Not Deemed a Stockholder.
No
holder of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights, nor shall anything contained herein or in any Right Certificate be
construed to confer upon th holder of any Right Certificate any of the rights of
a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders, or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Rights evidenced by such Right Certificate shall have been
exercised.
Section 17.
Concerning
the Rights Agent.
(a) The
Company agrees to pay the Rights Agent reasonable compensation for all services
rendered, and, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred (and, to the extent fees for such services are provided
for, such compensation and expenses are in accordance with the fee schedule
provided for in Exhibit D to the Service Agreement for Transfer Agent Services
to Caterpillar Inc., dated September 13, 2001 between the Company and Mellon
Investor Services) in the preparation, administration, delivery, execution and
amendment of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, damage, judgment, fine, penalty,
claim, demand, settlement, cost or expense, incurred without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent (each as
determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction), for any action taken, suffered or omitted by
the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability hereunder and of enforcing the rights of indemnification. The
provisions of this Section 17 and Section 19 below shall survive the expiration
of the Rights, the termination of this Agreement and the resignation or removal
of the Rights Agent.
(b) The
Rights Agent shall be authorized and protected and shall incur no liability for
any action in connection with its acceptance and administration of this
Agreement in reliance upon any Right Certificate or certificate for Common
Shares or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other document believed to be genuine and
signed, executed and, where necessary, verified or acknowledged, by the proper
Persons, or otherwise upon the advice of counsel as set forth in Section 19. The
Rights Agent shall not be deemed to have knowledge of any event of which it was
supposed to receive notice thereof hereunder, and the Rights Agent shall be
fully protected and shall incur no liability for failing to take any action in
connection therewith unless and until it has received such notice in
writing.
13
Section 18.
Merger
or Consolidation or Change of Name of Rights Agent.
(a) Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any Person succeeding to the stock transfer or all or substantially
all of the corporate trust business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such Person would be eligible for appointment
as a successor Rights Agent. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) If
the name of the Rights Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 19.
Duties
of Rights Agent.
The Rights Agent
undertakes only those duties and obligations imposed by this Agreement (and no
implied duties and obligations) upon the following terms and conditions, all of
which the Company and the holders of Rights Certificates shall be
bound:
(a) The
Rights Agent may consult with legal counsel and the advice or opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent, and the Rights Agent shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in accordance with such advice or
opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking, suffering or omitting to take action hereunder,
such fact or matter may be deemed to be conclusively proved and established by a
certificate signed by the Chief Executive Officer, any Group President or any
Vice President of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the Rights Agent for
any action in reliance upon such certificate.
(c) The
Rights Agent shall be liable only for its own gross negligence, bad faith or
willful misconduct (each as determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction). Any liability
of the Rights Agent under this Agreement will be limited to the amount of fees
paid by the Company to the Rights Agent.
(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 the Right Certificates (except
its countersignature on such Right Certificates) 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.
14
(e) The
Rights Agent shall not be under any responsibility or have any liability in
respect of the validity of this Agreement or its execution and delivery (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any change in the exercisability of the Rights, a transfer to
an Acquiring Person or any adjustment required under Section 11 or Section 13 or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after receipt of the certificate described in Section 12); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be validly authorized and
issued, fully paid and non-assessable.
(f) The
Company agrees that it will perform, execute, acknowledge and deliver acts,
instruments and assurances reasonably required by the Rights Agent.
(g) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chairman,
any Group President, or Vice President of the Company, and to apply to such
officers for advice or instructions in connection with its duties and such
instructions shall be full authorization and protection to the Rights Agent, and
the Rights Agent shall not be liable for any action taken, suffered or omitted
by it in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Right Agent,
set forth in writing any action proposed to be taken or omitted by the Right
Agent under this Rights Agreement and the date on or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instruction in response to such application specifying the action to be taken,
suffered or omitted.
(h) The
Rights Agent and any stockholder, affiliate, 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 Person.
(i) The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or agents or for any
loss to the Company or any other reason resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith or willful misconduct
(each as determined by a final, non-appealable order, judgment, decree or ruling
or a court of competent jurisdiction) 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 it reasonably
believes that repayment of such funds or adequate indemnification against such
risk or liability is not assured it.
15
Section 20.
Change
of Rights Agent.
The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing to the Company and to
holders of the Rights Certificates. The Company may remove the Rights Agent or
any successor Rights Agent upon thirty (30) days' written notice to the Rights
Agent or successor Rights Agent and to holders of the Rights Certificates. If
the Rights Agent shall resign or be removed, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
a court, shall be (i) a Person organized and doing business under the laws of
the United States or of the State of Illinois or New York (or of any other state
of the United States so long as such Person is authorized to do business as a
banking institution in the State of Illinois or New York), in good standing,
having an office in the State of Illinois or New York, is authorized under such
laws to exercise corporate trust or transfer powers and which is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000, or (ii) an Affiliate of a Person described in clause (i).
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice in writing to the registered holders of the
Right Certificates. Failure to give adequate notice shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment, of the successor Rights Agent.
Section 21.
Issuance
of New Right Certificates.
(a) The
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
(b) In
addition, in connection with the issuance or sale of Common Shares following the
Distribution Date, and prior to the earlier of the Redemption Date and the Final
Expiration Date, the Company (a) shall with respect to Common Shares as 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, notes
or debentures issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided,
however, that (i) the
Company shall not be obligated to issue any such Right Certificates 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 Right Certificate would be issued, and (ii)
no Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 22.
Redemption
and Termination.
(a) (i) The
Board of Directors of the Company may, at its option, redeem all but not less
than all outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction (such redemption price being hereinafter referred to as the
"Redemption
Price"). Redemption of
the Rights may be effective at such time, on such basis and with such conditions
as the Board of Directors of the Company, in its sole discretion, may
establish.
16
(b) Immediately
upon redemption, the right to exercise the Rights will terminate and the only
right thereafter of the holders shall be to receive the Redemption Price. The
Company shall promptly give public notice of any redemption; provided,
however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within ten (10) days after the date for redemption set forth in a
resolution of the Board of Directors ordering the redemption, the Company shall
mail a notice of redemption to all the holders of the outstanding Rights and
shall give prompt written notice to the Rights Agent. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights in any manner other than that specifically set forth in this Section
and other than in connection with the purchase of Common Shares prior to the
Distribution Date.
(c) The
Company may discharge all of its obligations by (i) issuing a press release
announcing the manner of redemption of the Rights in accordance with this
Agreement and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights.
Section 23.
Exchange.
(a) The
Board of Directors of the Company may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the then outstanding
and exercisable Rights for Common Shares at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). The Board of
Directors shall not be empowered to effect an exchange after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company, or any such Subsidiary, any entity holding Common Shares for or
pursuant to the terms of any such a plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares outstanding.
(b) Immediately
upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to subsection (a) 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 shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any exchange
(with prompt written notice thereof to the Rights Agent); provided,
however, that the failure
to give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall promptly mail notice of any exchange to all holders.
Each notice will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of valid Rights held.
(c) In
any exchange pursuant to this Section, the Company, at its option, may
substitute Preferred Shares for some or all of the Common Shares exchangeable
for Rights, at the initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) for each Common Share, as appropriately adjusted to
reflect adjustments in the voting rights of the Preferred Shares, so that the
fraction of a Preferred Share delivered in lieu of each Common Share shall have
the same voting rights as one Common Share.
(d) In
the event that there shall not be sufficient Common Shares or Preferred Shares
authorized to permit an exchange of Rights, the Company shall take all action
necessary to authorize additional Common Shares or Preferred Shares for
issuance.
17
Section 24. Notice of Certain Events.
(a) If
the Company shall propose (i) to pay any dividend payable in stock of any class
to the holders of its Preferred Shares, (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with any other Person or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other transfer) in
one or more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries to any other Person or Persons, or (v) to effect
the liquidation, dissolution or winding up of the Company, then the Company
shall give to each holder of a Right Certificate notice of such proposed action
and file a certificate with the Rights Agent to that effect, which shall specify
the record date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to occur and
the date of participation by the holders of the Preferred Shares. Such notice
shall be given in the case of any action covered by clause (i) or (ii) above at
least ten (10) days prior to the date for determining holders of the Preferred
Shares for purposes of the action, and in the case of any other action, at least
ten (10) days prior to the date of the taking of the proposed action or the date
of participation therein by the holders of the Preferred Shares, whichever shall
be earlier.
(b) In
case of a Section 11(a)(ii) Event, (i) the Company shall as soon as practicable
give to each holder of a Right Certificate, notice of such event, and (ii) all
references in the preceding paragraph (a) to Preferred Shares shall be deemed
thereafter to refer also to Common Shares and/or, if appropriate, other
securities of the Company.
Section 25.
Notices.
Notices or demands
authorized by this Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) or by facsimile transmission
as follows:
Attn: General
Counsel and Corporate Secretary
▇▇▇ ▇. ▇. ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇
Attention:
Secretary
Facsimile No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
Mellon Investor
Services LLC
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇. ▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention:
Relationship Manager
Facsimile No.:
(▇▇▇) ▇▇▇-▇▇▇▇
18
with a copy
to:
Mellon Investor
Services LLC
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: General
Counsel
Facsimile No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Notices or demands
authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right Certificate or, if prior to the Distribution
Date, to the holder of certificates representing Common Shares shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26.
Supplements
and Amendments.
Prior to the
Distribution Date, the Company and the Rights Agent may, if the Company so
directs but subject to the other provisions of this Section, supplement or amend
any provision of this Agreement without the approval of any holders of
certificates representing Common Shares. From and after the Distribution Date,
the Company and the Rights Agent may, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interest of the holders of Right Certificates (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person); provided,
however, that this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable, or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section, the Rights Agent shall execute such supplement or amendment, provided
that such supplement or amendment does not adversely affect the rights, duties,
liabilities or obligations of the Rights Agent under this Agreement. Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares.
Section 27.
Successors.
All the covenants
and provisions of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their respective successors
and assigns hereunder.
Section 28.
Severability.
If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 29.
Governing
Law.
This Agreement,
each Right and each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State.
19
Section 30.
Determinations
And Actions By The Board Of Directors, Etc.
(a) The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Rights Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to the Company, or as may be
necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Rights Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including a determination to redeem or not redeem the Rights or to amend the
Rights Agreement and a determination of whether there is an Acquiring Person.
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 shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board of Directors to
any liability to the holders of the Rights. The Rights Agent
shall always be entitled to assume that the Company's Board of Directors acted
in good faith and shall be fully protected and incur no liability in reliance
thereon.
(b) It
is understood that the TIDE Committee (as defined below) of the Board of
Directors shall review and evaluate this Rights Agreement in order to consider
whether the maintenance of this Rights Agreement continues to be in the
interests of the Company, its shareholders and any other relevant constituencies
of the Company, at least every three years, or sooner if any Person shall have
made a proposal to the Company, or taken any other action, that, if effective,
could cause such Person to become an Acquiring Person hereunder, if a majority
of the members of the TIDE Committee shall deem such review and evaluation
appropriate after giving due regard to all relevant circumstances. Following
each such review, the TIDE Committee will communicate its conclusions to the
full Board of Directors, including any recommendation in light thereof as to
whether this Rights Agreement should be modified or the Rights should be
redeemed. The TIDE Committee shall be comprised of the members of the Nominating
and Governance Committee of the Board, composed of Directors of the Company who
are not officers, employees or Affiliates of the Company.
Section 31.
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.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and attested, all as of the date and year first above
written.
|
Attest: |
|||||
|
By: |
/s/▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
By: |
/s/▇▇▇▇▇
▇. ▇▇▇▇
| ||
|
Name: |
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ |
Name: |
▇▇▇▇▇ ▇.
▇▇▇▇ | ||
|
Title: |
Assistant
Secretary |
Title: |
Vice
President & Secretary | ||
|
Mellon
Investor Services LLC | |||||
|
Attest: |
|||||
|
By: |
/s/▇▇▇▇
▇. ▇▇▇▇▇▇ |
By: |
/s/▇▇▇▇
▇. Brunette | ||
|
|
| ||||
|
Name: |
▇▇▇▇ ▇.
▇▇▇▇▇▇ |
Name: |
▇▇▇▇ ▇.
Brunette | ||
|
Title: |
Assistant
Vice President |
Title: |
Assistant
Vice President | ||
20
Exhibit A
to Rights Agreement
Form of Right
Certificate
Certificate No.
R-
NOT EXERCISABLE
AFTER JUNE 30, 2005 OR EARLER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT.
Right
Certificate
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 Amended and
Restated Rights Agreement, dated as of September 27, 2001 (the "Rights
Agreement"), between Caterpillar Inc., a Delaware corporation (the "Company")
and Mellon Investor Services LLC, a New Jersey limited liability company (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.,
New York City time, on April 30, 2006 at the office of the Rights Agent
designated for such purposes, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the Company, (the
"Preferred Shares") at a purchase price of $300 (subject to adjustment as
provided in the Rights Agreement) per one one-hundredth of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-hundredths
of a Preferred Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of December 11, 1996, based on the Preferred Shares as constituted at such
date. As provided in the Rights Agreement, the Purchase Price and the number of
one one-hundredths of a Preferred Share which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
This Right
Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are incorporated by
reference. Copies of the Rights Agreement are on file at the offices of the
Company and Rights Agent.
This Right
Certificate, with or without other Right Certificates, upon surrender at the
office of the Rights Agent designated for such purposes, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the
provisions of the Rights Agreement, the Rights evidenced by this Right
Certificate (i) may be redeemed by the Company at a redemption price of $.01 per
Right or (ii) may be exchanged for shares of the Company's Common Stock, par
value $1.00 per share.
21
Exhibit
A
No fractional
Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts), but, in lieu thereof, a cash payment will
be made, as provided in the Rights Agreement.
No holder of this
Right Certificate shall be entitled to vote or receive dividends or be deemed
for any purpose the holder of the Preferred Shares or of any other securities of
the Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein, be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right
Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.
WITNESS the
facsimile signature of the proper officers of the Company and its corporate
seal.
Dated as of
..
ATTEST:
By
Name: Name:
Title: Title:
Countersigned:
MELLON INVESTOR
SERVICES LLC
By
Name:
Title:
22
Exhibit A
Form of Reverse
Side of Right Certificate
FORM OF
ASSIGNMENT
(To be executed by
the registered holder if such
holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfer unto
(Please print name
and address of transferee)
this Right
Certificate, together with all rights, title and interest therein, and does
hereby irrevocably constitute and appoint Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of
substitution.
Dated:
___________________________________
Signature
Signature
Guaranteed:
Signatures must be
guaranteed by a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the United
States.
The undersigned
hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
___________________________________
Signature
23
Exhibit A
- - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
FORM OF ELECTION TO
PURCHASE
(To be executed if
holder desires to exercise Rights represented by the Right
Certificate.)
To: CATERPILLAR
INC.
The undersigned
hereby irrevocably elects to exercise Rights represented by this Right
Certificate to purchase the Preferred Shares issuable upon the exercise of such
Rights and requests that certificates for such Preferred Shares be issued in the
name of:
Please insert
social security or other identifying number
(Please print name
and address)
If such number of
Rights shall not be all the Rights evidenced by this Right Certificate, a new
Right Certificate for the balance 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
Guaranteed:
Signatures must be
guaranteed by a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the United
States.
The undersigned
hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
____________________________________
Signature
NOTICE
The signature in
the Form of Assignment or Form of Election to Purchase must conform to the name
as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the
certification set forth above in the Form of Assignment or the Form of Election
to Purchase is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Right Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be
honored.
24
Exhibit
B
Exhibit B
to Rights Agreement
December 23,
1996
RE: SUMMARY
OF RIGHTS TO PURCHASE PREFERRED SHARES
On December 11,
1996, the Board of Directors of Caterpillar Inc. declared a dividend of one
preferred share purchase right (a "Right") for each outstanding share of
Caterpillar common stock (the "Common Shares"). The dividend is payable on
December 23, 1996 (the "Record Date") to stockholders of record on that date.
Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock (the
"Preferred Shares") for $300 (the "Purchase Price"), subject to adjustment.
Terms of the Rights are in a Rights Agreement (the "Rights Agreement") between
the Company and Mellon Investor Services LLC (the "Rights Agent").
Separate
certificates evidencing the Rights will not be distributed until the earlier
of:
| · |
10 days
following public announcement that a person (an "Acquiring Person") has
acquired 15% or more of the outstanding Common Shares;
or |
| · |
10 business
days following commencement of a tender offer or exchange offer which
would result in a person or group owning15% or more of the outstanding
Common Shares (the "Distribution Date"). |
Until the
Distribution Date:
| · |
the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by the Common Share certificate with a
copy of this Summary of Rights attached; |
| · |
the Rights
will be transferred only with the Common
Shares; |
| · |
new Common
Share certificates will contain a notation incorporating the Rights
Agreement by reference; |
| · |
the surrender
for transfer of any certificates for Common Shares outstanding as of the
Record Date, even without such notation or a copy of this Summary of
Rights attached, will constitute the transfer of the Rights associated
with the Common Shares. |
Following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and these separate Right
Certificates alone will evidence the Rights.
25
Exhibit
B
The Rights are not
exercisable until the Distribution Date. The Rights will expire on June 30, 2005
(the "Final Expiration Date"), unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company. The number
of outstanding Rights, the Purchase Price, and the number of Preferred Shares
issuable upon exercise of the Rights are subject to adjustment to prevent
dilution.
If any person
becomes an Acquiring Person, each Right holder, other than the Acquiring Person,
will have the right to receive that number of Common Shares having a market
value of two times the exercise price of the Right. If the Company is acquired
in a merger or other transaction or 50% or more of its consolidated assets or
earning power are sold after a person becomes an Acquiring Person, each holder
of a Right will have the right to receive that number of shares of common stock
of the acquiring company having a market value of two times the exercise price
of the Right.
At any time after
any person becomes an Acquiring Person and prior to the acquisition by such
person of 50% or more of the outstanding Common Shares, the Board of Directors
may exchange the Rights at a ratio of one Common Share, or one one-hundredth of
a Preferred Share, per Right.
At any time prior
to the acquisition by a person of 15% or more of the outstanding Common Shares,
the Board of Directors of the Company may redeem the Rights in whole at a price
of $.01 per Right (the "Redemption Price"). Immediately upon redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the Rights holders will be to receive the Redemption Price.
A copy of the
Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights
Agreement also is available free of charge from the Company by contacting the
Company's Secretary. This summary description of the Rights is qualified in its
entirety by the Rights Agreement which is incorporated by
reference.
26