Great Lakes Chemical Corporation
and
▇▇▇▇▇▇ Trust Company of New York
Rights Agent
RIGHTS AGREEMENT
Dated as of September 7, 1989,
as Amended and Restated as of
December 7, 1995
Table of Contents
Page
Recitals . . . . . . . . . . . . . . . . . . . . . . 1
Section
Section 1. Certain Definitions . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . 10
Section 3. Issuance of Rights Certificates . . . . 10
Section 4. Form of Rights Certificates . . . . . . 12
Section 5. Execution, Countersignature and Regis-
tration . . . . . . . . . . . . . . . 14
Section 6. Transfer, Division, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . 14
Section 7. Exercise of Rights Purchase Price;
Expiration Date of Rights . . . . . . 16
Section 8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . 19
Section 9. Reservation and Availability of Common
Stock . . . . . . . . . . . . . . . . 19
Section 10. Record Date for Securities Issued Upon
Exercise of Rights . . . . . . . . . 22
Section 11. Antidilution Adjustments . . . . . . . 22
Section 12. Certification of Adjustments . . . . . 33
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power . 34
Section 14. Fractional Rights, Fractional Shares
and Fractional Notes . . . . . . . . 37
Section 15. Rights of Action . . . . . . . . . . . 39
Section 16. Agreement of Rights Holders Concerning
Transfer and Ownership of Rights . . 40
Section 17. Rights Holder Not Deemed a Stockholder 40
Section 18. Concerning the Rights Agent . . . . . . 41
Section 19. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . 42
Section 20. Duties of Rights Agent . . . . . . . . 42
Section 21. Change of Rights Agent . . . . . . . . 45
Section 22. Issuance of New Rights Certificates . . 46
Section 23. Redemption and Termination . . . . . . 47
Section 24. Notice of Certain Events . . . . . . . 48
Section 25. Notices . . . . . . . . . . . . . . . . 49
Section 26. Supplements and Amendments . . . . . . 50
Section 27. Exchange . . . . . . . . . . . . . . . 52
Section 28. Successors . . . . . . . . . . . . . . 53
Section 29. Benefits of this Agreement . . . . . . 53
Section 30. Severability . . . . . . . . . . . . . 54
Section 31. Governing Law . . . . . . . . . . . . . 54
Section 32. Counterparts . . . . . . . . . . . . . 54
Section 33. Descriptive Headings . . . . . . . . . 55
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
RIGHTS AGREEMENT
Rights Agreement dated as of September 7, 1989,
as amended and restated as of December 7, 1995, between
Great Lakes Chemical Corporation, a Delaware corporation
(the "Company"), and ▇▇▇▇▇▇ Trust Company of New York, a
New York corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company
has authorized and declared a dividend of one Common
Stock (as defined in Section 1) and Note (as defined in
Section 1) purchase right (the "Right") for each share of
Common Stock outstanding on the Record Date and has
authorized the issuance of one Right for each share of
such Common Stock issued between the Record Date and the
Distribution Date (as defined in Section 1) and, in
certain circumstances provided in Section 22 hereof,
after the Distribution Date, each Right initially
representing the right to purchase one unit (a "Unit"),
each Unit consisting initially of one-tenth (1/10) share
of Common Stock and a Note in principal amount equal to
nine-tenths (9/10) of the Current Market Price (as
hereinafter defined) of a share of Common Stock, upon the
terms and subject to the conditions hereinafter set
forth; and
WHEREAS, on December 7, 1995, the Board of
Directors of the Company determined to amend and restate
the Agreement and directed the Rights Agent to enter into
this amendment and restatement.
NOW, THEREFORE, in consideration of the
premises and the mutual agreements set forth in this
Agreement, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes
of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any
Person who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Stock then outstanding
(determined without taking into account any securities
exercisable or exchangeable for, or convertible into,
Common Stock, other than any such securities beneficially
owned by the Acquiring Person and Affiliates and
Associates of such Person). "Acquiring Person" shall not
include any Exempt Person.
No Person shall become an "Acquiring Person"
solely as the result of an acquisition of Common Stock by
the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the
Common Stock of the Company then outstanding as
determined above; provided, however, that if a Person
becomes and remains the Beneficial Owner of 15% or more
of the Common Stock of the Company then outstanding (as
determined above) solely by reason of share purchases by
the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional
shares of Common Stock by any means whatsoever, then such
Person shall be deemed to be an "Acquiring Person."
(b) "Adverse Person" shall mean any
Person declared to be an Adverse Person by the Board of
Directors upon determination that the criteria set forth
in Section 11(a)(ii)(B) apply to such Person; provided,
however, that the Board of Directors shall not declare
any Person who is the Beneficial Owner of 10% or more of
the outstanding Common Stock of the Company to be an
Adverse Person if such Person has reported or is required
to report such ownership on Schedule 13G under the
Exchange Act (or any comparable or successor report) or
on Schedule 13D under the Exchange Act (or any comparable
or successor report) which Schedule 13D does not state
any intention to or reserve the right to control or
influence the management or policies of the Company or
engage in any of the actions specified in Item 4 of such
Schedule (other than the disposition of the Common Stock)
so long as such Person neither reports nor is required to
report such ownership other than as described in this
proviso.
(c) "Affiliate" shall have the meaning
given to such term in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the
date of this Agreement.
(d) "Associate" of a Person shall mean
(i) any corporation or other organization of which such
Person is an officer, director, partner or beneficial
owner of 10% of any class of equity securities; (ii) any
trust or other estate in which such Person has a
substantial beneficial interest or as to which such
Person serves as trustee or in a similar fiduciary
capacity; and (iii) any relative or spouse of such
Person, or any relative of such spouse.
(e) Except as provided below, a Person
shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficiallY own," any securities:
(i) which such Person or any
Affiliate or Associate of such Person
beneficially owns, directly or indirectly;
(ii) which such Person or any
Affiliate or Associate of such Person has,
directly or indirectly, the right (whether or
not then exercisable) to acquire pursuant to
any agreement, arrangement or understanding
(whether or not in writing), or upon the
exercise of conversion rights, exchange rights,
rights (other than these Rights), warrants or
options, or otherwise; provided, however, that
a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any
Affiliate or Associate of any such Person until
such tendered securities are accepted for
purchase or exchange:
(iii) which such Person or any
Affiliate or Associate of such Person has,
directly or indirectly, the right (whether or
not then exercisable) to vote pursuant to any
agreement, arrangement or understanding
(whether or not in writing); provided, however,
that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own,
any security pursuant to this clause (iii) if
the agreement, arrangement or understanding to
vote such security (A) arises solely from a
revocable proxy or consent given in response to
a public proxy or consent solicitation made
pursuant to, and in accordance with, the
Exchange Act and applicable rules and
regulations thereunder and (B) is not also then
reportable under Item 6 of Schedule 13D under
the Exchange Act (or any comparable or
successor report); or
(iv) which are beneficially
owned, directly or indirectly, by any other
Person or any Affiliate or Associate of such
other Person with whom such Person or any
Affiliate or Associate of such Person has any
agreement, arrangement or understanding
(whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to
a revocable proxy as described in subparagraph
(iii) of this paragraph (c)) or disposing of
any securities of the Company.
Nothing in this Section 1(d) shall cause a
Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the
date of such acquisition.
(f) "Business Combination" shall have the
meaning set forth in Section 13.
(g) "Business Day" shall mean any day
other than a Saturday, Sunday, or a day on which banking
institutions in the State of New York are authorized or
obligated by law or executive order to close.
(h) "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.
(i) "Common Stock" when used in any
context applicable prior to a Business Combination shall
mean the Common Stock, par value $1.00 per share, of the
Company (as the same may be changed by reason of any
combination, subdivision or reclassification of the
Common Stock). "Common Stock" when used with reference
to any Person (other than the Company prior to a Business
Combination) shall mean shares of capital stock of such
Person (if such Person is a corporation) of any class or
series, or units of equity interests in such Person (if
such Person is not a corporation) of any class or series,
the terms of which shares or units do not limit (as a
fixed amount and not merely in proportional terms) the
amount of dividends or income payable or distributable on
such shares or units or the amount of assets
distributable on such shares or units upon any voluntary
or involuntary liquidation, dissolution or winding up of
such Person and do not provide that such shares or units
are subject to redemption at the option of such Person,
or any shares of capital stock or units of equity
interests into which the foregoing shall be reclassified
or changed; provided, however, that if at any time there
shall be more than one such class or series of capital
stock of or equity interests in such Person, "Common
Stock" of such Person shall include all such classes and
series substantially in the proportion of the total
number of shares or other units of each such class or
series outstanding at such time.
(j) "Current Market Price" per share of
Common Stock or Equivalent Shares on any date shall be
deemed to be the average of the daily closing prices per
share of such Common Stock or Equivalent Shares for the
30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date for the purpose
of any computation under this Agreement except
computations made pursuant to Section 11(a)(iii), or for
the 10 consecutive Trading Days immediately following
such date for the purpose of any computation under
Section 11(a)(iii); provided, however, that in the event
that the Current Market Price per share of Common Stock
or Equivalent Shares is determined during a period
following the announcement by the issuer of such Common
Stock or Equivalent Shares of (i) a dividend or
distribution on such Common Stock or Equivalent Shares
payable in shares of such Common Stock or Equivalent
Shares or securities convertible into or exercisable or
exchangeable for shares of such Common Stock or
Equivalent Shares, or (ii) any subdivision, combination
or reclassification of such Common Stock or Equivalent
Shares, and prior to the expiration of 30 Trading Days
after the "ex-dividend" date for such dividend or
distribution or the record date for such subdivision,
combination or reclassification, then, and in each such
case, the "Current Market Price" shall be appropriately
adjusted to take into account such dividend,
distribution, subdivision, combination or
reclassification. The closing price for each day shall
be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange, Inc.
or, if the Common Stock or Equivalent Shares are not
listed or admitted to trading on the New York Stock
Exchange, Inc., as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the Common Stock or Equivalent Shares are listed or
admitted to trading or, if the Common Stock or Equivalent
Shares are not listed or admitted to trading on any
national securities exchange, the last quoted sale price
or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported
on the Nasdaq Stock Market or such other system then in
use. If on any such date the Common Stock or Equivalent
Shares are not quoted on the Nasdaq Stock Market, the
average of the closing bid and asked prices as furnished
by a professional market maker making a market in the
Common Stock or Equivalent Shares selected by the Board
of Directors of the Company shall be used. If no such
market maker exists or is selected, the fair market value
of such shares on such date as determined in good faith
by the Board of Directors of the Company of the issuer of
such Common Stock or Equivalent Shares shall be used.
The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the
Common Stock or Equivalent Shares are listed or admitted
to trading is open for the transaction of business or, if
the Common Stock or Equivalent Shares are not listed or
admitted to trading on any national securities exchange,
a Business Day. If the Common Stock or Equivalent Shares
are not publicly held, not so listed or traded or have
not been previously in existence for 30 Trading Days,
"Current Market Price" per share shall mean the fair
market 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.
(k) "Distribution Date" shall mean the
Close of Business on the earlier of (i) the tenth day
after the Stock Acquisition Date, (ii) the tenth day
after the first date (including, without limitation, any
such date which is on or after the date of this Agreement
and prior to the issuance of the Rights) of the
commencement of, or first public disclosure of the intent
to commence, by any Person (other than an Exempt Person)
a tender or exchange offer for securities of the Company
if, upon consummation thereof, such Person could be the
Beneficial Owner of 15% or more of the Common Stock then
outstanding, determined without taking into account any
securities exercisable or exchangeable for, or
convertible into, Common Stock (other than any such
securities beneficially owned by such Person) and (iii)
the tenth Business Day after the Board of Directors
determines, pursuant to the criteria set forth in Section
11(a)(ii)(B) hereof, that a Person is an Adverse Person.
(l) "Equivalent Shares" shall mean any
class or series of capital stock of the Company, other
than the Common Stock, which is entitled to participate
on a proportional basis with the Common Stock in
dividends and other distributions, including
distributions upon the liquidation, dissolution or
winding up of the Company. In calculating the number of
any class or series of Equivalent Shares for purposes of
Section 11 or 27, the number of shares, or fractions of a
share, of such class or series of capital stock that is
entitled to the same dividend or distribution as a whole
share of Common Stock shall be deemed to be one share.
(m) "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and any
successor statute.
(n) "Exempt Person" shall mean the
Company, any subsidiary of the Company, any employee
benefit plan of the Company or of any subsidiary of the
Company, or any Person holding Common Stock for or
pursuant to the terms of any such plan.
(o) "Expiration Date" shall mean the
Close of Business on September 22, 1999.
(p) "Indenture" shall mean the Indenture,
dated as of September 7, 1989, between the Company and
Bank of Montreal Trust Company, as trustee, as originally
executed or as it may from time to time be supplemented
or amended by one or more indentures supplemental thereto
and shall include the terms of the particular series of
securities issued thereunder, including the Notes.
(q) "Note" shall mean a subordinated note
issuable under the Indenture and pursuant to this
Agreement upon the exercise of any Right prior to the
occurrence of any Triggering Event or Business
Combination. Each Note shall be substantially in the
form of Exhibit I to the Indenture and shall initially be
issuable in principal amount equal to nine-tenths (9/10)
of the Current Market Price of the Common Stock
calculated on the date of exercise of the Right with
respect to which such Note is being issued. Each Note
shall bear interest from and after its date of issuance
at a rate set at or prior to the initial issuance of the
first Note to be issued by the Board of Directors of the
Company, in its sole discretion, who may rely on the
advice of an independent investment banking firm. The
rate of interest will be designated to have such Note
trade immediately following such initial issuance at par.
Notes will be issued only in registered form, without
coupons, in denominations of $10 and integral multiples
thereof. The Notes shall be subject to all the terms and
conditions of the Indenture, which is incorporated herein
by reference.
(r) "Person" shall mean any individual,
firm, corporation, partnership, joint venture,
association, trust, unincorporated organization or other
entity, and shall include any "group" as that term is
used in Rule 13d-5(b) under the Exchange Act.
(s) "Principal Party" shall mean, in the
case of any Business Combination described in clauses
(i), (ii) or (iii) of the first sentence of Section
13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are
converted or for which they are exchanged in such
Business Combination or, if no securities are so issued,
the Person that is the other party to such Business
Combination, and, in the case of any Business Combination
described in clause (iv) of the first sentence in Section
13(a), the Person that receives the greatest portion of
the assets or earning power transferred pursuant to such
Business Combination; provided, however, that in any such
case, if the Common Stock of such Person is not at such
time and has not been continuously over the preceding
12-month period registered under Section 12 of the
Exchange Act and such Person is a direct or indirect
subsidiary of one or more other Persons, then (i)
"Principal Party" shall refer to whichever of such other
Persons has Common Stock that is and has been
continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act; (ii) if
the Common Stocks of two or more of such other Persons
are and have been so registered, "Principal Party" shall
refer to whichever of such other Persons is the issuer of
the Common Stock having the greatest aggregate market
value; or (iii) if none of the Common Stock(s) of such
other Persons have been so registered, "Principal Party"
shall refer to whichever of such other Persons (other
than an individual) is the Person having the equity
securities with the greatest aggregate market value.
(t) "Purchase Price" with respect to each
Right shall be $92.50 per Unit (as adjusted from the
initial Purchase Price of $370 per Unit to reflect the
Company's 100% stock dividends on January 30, 1992 and
October 31, 1989), shall be subject to further adjustment
from time to time as provided in Sections 11 and 13, and
shall be payable in lawful money of the United States of
America in cash or by certified check or bank draft
payable to the order of the Company.
(u) "Record Date" shall mean September
22, 1989.
(v) "Redemption Date" shall mean the time
at which the Rights are ordered to be redeemed as
provided in Section 23.
(w) "Securities Act" shall mean the
Securities Act of 1933, as amended, and any successor
statute.
(x) "Stock Acquisition Date" shall mean
the first date (including, without limitation, any such
date which is on or after the date of this Agreement and
prior to the issuance of the Rights) of public disclosure
by the Company, an Acquiring Person or otherwise that a
Person has become an Acquiring Person.
(y) "subsidiary" shall have the meaning
given to such term in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the
date of this Agreement.
(z) "Summary of Rights" shall mean a
summary of the Rights, in substantially the form attached
hereto as Exhibit B.
(aa) "Triggering Event" shall have the
meaning set forth in Section 11(a)(ii).
(ab) "Unit" shall have the meaning set
forth in the preamble to this Agreement.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of Rights in accordance
with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may
deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the Distribution Date: (i) the
Rights shall be issued in respect of and shall be
evidenced by the certificates representing the shares of
Common Stock issued and outstanding on the Record Date
and shares of Common Stock issued after the Record Date
and prior to the earliest of the Distribution Date, the
Redemption Date, or the Expiration Date (which
certificates for Common Stock shall be deemed to also be
certificates evidencing the Rights), and not by separate
certificates; (ii) the registered holders of such shares
of Common Stock shall also be the registered holders of
the Rights associated with such shares; and (iii) the
Rights shall be transferable only in connection with the
transfer of shares of Common Stock, and the surrender for
transfer of any certificate for such shares of Common
Stock shall also constitute the surrender for transfer of
the Rights associated with such shares. As soon as
practicable after the Company has notified the Rights
Agent of the occurrence of the Distribution Date, the
Rights Agent shall mail, by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock
as of the Close of Business on the Distribution Date, as
shown by the records of the Company, at the address of
such holder shown on such records, one or more
certificates evidencing the Rights ("Rights
Certificates"), in substantially the form of Exhibit B
hereto, evidencing one Right (as adjusted from time to
time prior to the Distribution Date pursuant to this
Agreement) for each share of Common Stock so held. From
and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates. In the
event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Section
11(o) of this Agreement, at the time of distribution of
the Rights Certificates, the Company may make the
necessary and appropriate rounding adjustments (in
accordance with Section 14(a) of this Agreement) so that
Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any
fractional Rights.
(b) As soon as practicable after the
Record Date, the Company will send a copy of the Summary
of Rights by first-class, postage prepaid mail, to each
record holder of Common Stock as of the Close of Business
on the Record Date, as shown by the records of the
Company, at the address of such holder shown on such
records.
(c) Rights shall be issued in respect of
all shares of Common Stock which are issued after the
Record Date but prior to the earliest of the Distribution
Date, the Redemption Date and the Expiration Date or, in
certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates issued after
the Record Date representing shares of Common Stock
outstanding on the Record Date or shares issued after the
Record Date but prior to the earliest of the Distribution
Date, the Redemption Date and the Expiration Date shall
have impressed, printed, or written on, or otherwise
affixed to them a legend substantially in the following
form:
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in a Rights Agreement between Great Lakes
Chemical Corporation and ▇▇▇▇▇▇ Trust Company
of New York as Rights Agent dated as of
September 7, 1989, as amended from time to time
(the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and
a copy of which is on file at the principal
executive offices of Great Lakes Chemical
Corporation. 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. Great Lakes Chemical Corporation
will mail to the holder of this certificate a
copy of the Rights Agreement without charge
after receipt of a written request therefor.
Under certain circumstances, Rights
beneficially owned by Acquiring Persons,
Adverse Persons or their Associates or
Affiliates (as such terms are defined in the
Rights Agreement) may become null and void and
the holder of such Rights (including any
subsequent holder) shall not have any right to
exercise such Rights.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the form
of election to purchase shares and form of assignment to
be printed on the reverse thereof) shall be in
substantially the form of Exhibit B hereto and may have
such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may
from time to time be listed, or to conform to usage.
Subject to the provisions of this Agreement, the Rights
Certificates, whenever issued, shall be dated as of the
Distribution Date, and on their face shall entitle the
holders thereof to purchase such number of Units as shall
be set forth therein at the Purchase Price set forth
therein, but the number of such Units and the Purchase
Price shall be subject to adjustment as provided in this
Agreement.
(b) Notwithstanding any other provision
of this Agreement, (i) any Rights Certificate issued
pursuant to this Agreement that represents Rights
beneficially owned or formerly beneficially owned, on or
after the earlier of the Distribution Date and the Stock
Acquisition Date, by a Person known to be: (A) an
Acquiring Person, an Adverse Person or an Associate or
Affiliate of an Acquiring Person or Adverse Person; (B) a
direct or indirect transferee of an Acquiring Person or
Adverse Person (or of an Associate or Affiliate of such
Acquiring Person or Adverse Person) who becomes a
transferee after the Acquiring Person or Adverse Person
becomes such; or (C) a direct or indirect transferee of
an Acquiring Person or Adverse Person (or of an Associate
or Affiliate of such Acquiring Person or Adverse Person)
who becomes a transferee prior to or concurrently with
the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (x) a direct or
indirect transfer (whether or not for consideration) from
the Acquiring Person or Adverse Person (or from an
Associate or Affiliate of such Acquiring Person or
Adverse Person) to holders of equity interests in such
Acquiring Person or Adverse Person (or to holders of
equity interests in an Associate or Affiliate of such
Acquiring Person or Adverse Person) or to any Person with
whom such Acquiring Person or Adverse Person (or an
Associate or Affiliate of such Acquiring Person or
Adverse Person) has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (y)
a direct or indirect transfer which the Board of
Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of Section 7(e) of this
Agreement, and (ii) any Rights Certificate issued
pursuant to this Agreement upon transfer, exchange,
replacement or adjustment of any other Rights Certificate
beneficially owned by a Person referred to in this
sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by a
Person who was or became an Acquiring Person,
Adverse Person or an Affiliate or Associate of
an Acquiring Person or Adverse Person (as such
terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the
Rights represented hereby may become null and
void in the circumstances specified in Section
7(e) of the Rights Agreement.
The absence of the foregoing legend on any Rights
Certificate shall in no way affect any of the other
provisions of the Agreement, including, without
limitation, the provisions of Section 7(e) hereof.
Section 5. Execution, Countersignature and
Registration.
(a) Each Rights Certificate shall be
executed on behalf of the Company by the Chairman of its
Board of Directors, its President or any Vice President,
either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. Each Rights Certificate shall be manually
countersigned by the Rights Agent and shall not be valid
for any purpose unless so countersigned. In case any
officer of the Company who shall have signed a Rights
Certificate shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance
and delivery by the Company, such Rights Certificate
nevertheless may be countersigned by the Rights Agent and
issued and delivered with the same force and effect as
though the Person who signed such Rights Certificate had
not ceased to be such officer of the Company; and any
Rights Certificate may be signed on behalf of the Company
by any Person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the
date of the execution of this Agreement any such Person
was not such an officer.
(b) Following the Distribution Date, the
Rights Agent shall keep or cause to be kept, at its
principal corporate trust office, books for registration
and transfer of the Rights Certificates issued hereunder.
Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number
of Rights evidenced by each Rights Certificate, and the
certificate number and the date of issuance of each
Rights Certificate.
Section 6. Transfer, Division, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates.
(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 and the
Expiration Date, any Rights Certificate or Rights
Certificates may be transferred, divided, combined or
exchanged for another Rights Certificate or Rights
Certificates, entitling the registered holder to purchase
a like number of Units (or other securities, cash or
other property, following a Triggering Event or Business
Combination, as the case may be) as the Rights
Certificate or Rights Certificates surrendered then
entitled such holder to purchase. Any registered holder
desiring to transfer, divide, combine or exchange any
Rights Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be
transferred, divided, combined or exchanged at the
principal corporate trust office of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver
to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested.
As a condition to such transfer, division, combination or
exchange, the Company may require payment by the
surrendering holder of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection
therewith. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have duly
completed and executed the form of assignment on the
reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the
Beneficial Owner (or such former or proposed Beneficial
Owner) thereof or such Beneficial Owner's Affiliates or
Associates as the Company shall reasonably request.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the
Rights Certificate if mutilated, the Company will make
and deliver a new Rights Certificate of like tenor to the
Rights Agent for delivery to the registered owner in lieu
of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights Purchase Price;
Expiration Date of Rights.
(a) Each Right shall entitle (except as
otherwise provided in this Agreement) the registered
holder thereof, upon the exercise thereof as provided in
this Agreement, to purchase, for the Purchase Price, at
any time after the Distribution Date and prior to the
earlier of the Expiration Date and the Redemption Date,
one Unit, subject to adjustment from time to time as
provided in Sections 11 and 13.
(b) The registered holder of any Rights
Certificate may exercise the Rights evidenced thereby
(except as otherwise provided in this Agreement) in whole
or in part at any time on or after the Distribution Date
and prior to the earlier of the Expiration Date and the
Redemption Date, by surrendering the Rights Certificate,
with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the
principal corporate trust office of the Rights Agent,
together with payment of the Purchase Price for each Unit
(or other securities, cash or other assets, as the case
may be) as to which the Rights are exercised.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by
payment of the Purchase Price for each Unit (or,
following a Triggering Event or Business Combination,
other securities, cash or other assets, as the case may
be) to be purchased and an amount in cash, certified bank
check or money order payable to the order of the Company
equal to any applicable transfer tax required to be paid
by the surrendering holder pursuant to Section 9(d), the
Rights Agent shall, subject to the provisions of this
Agreement, thereupon promptly (i)(A) requisition from any
transfer agent for the Common Stock of the Company (or
make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of
shares of Common Stock to be purchased (and the Company
hereby irrevocably authorizes its transfer agent to
comply with all such requests), or (B) if the Company
shall have elected to deposit the total number of shares
of Common Stock issuable upon exercise of the Rights with
a depositary agent, requisition from the depositary
agent, depositary receipts representing such number of
shares of Common Stock as are to be purchased (in which
case certificates for the Common Stock represented by
such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company shall direct
the depositary agent to comply with such request; (ii)
requisition from any trustee or securities registrar
under the Indenture (or make available, if the Rights
Agent is the trustee or securities registrar under the
Indenture) Notes for the total principal amount of Notes
which constitute part of the Units to be purchased (and
the Company hereby irrevocably authorizes the trustee or
securities registrar under the Indenture to comply with
all such requests); (iii) after receipt of such
certificates or depositary receipts and such Notes, cause
the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered
in such name or names as may be designated by such
holder; and (iv) if appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance
of fractional shares of Common Stock or fractional Notes
in accordance with Section 14 of this Agreement and,
promptly after receipt thereof, cause the same to be
delivered to or upon the order of the registered holder
of such Rights Certificate. In the event that the
Company is obligated to issue other securities (including
shares of Common Stock) of the Company, pay cash and/or
distribute other property pursuant to this Agreement, the
Company will make all arrangements necessary so that such
other securities, cash and/or other property are
available for distribution by the Rights Agent, if and
when appropriate.
(d) In case the registered holder of any
Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to
the provisions of Section 6 and Section 14.
(e) Notwithstanding anything in this
Agreement to the contrary, any Rights that are or were
formerly beneficially owned on or after the earlier of
the Distribution Date or the Stock Acquisition Date by
(i) an Acquiring Person, an Adverse Person or any
Associate or Affiliate of an Acquiring Person or Adverse
Person, (ii) a direct or indirect transferee of an
Acquiring Person or Adverse Person (or of an Associate or
Affiliate of such Acquiring Person or Adverse Person) who
becomes a transferee after the Acquiring Person or
Adverse Person becomes such, or (iii) a direct or
indirect transferee of an Acquiring Person or Adverse
Person (or of an Associate or Affiliate of such Acquiring
Person or Adverse Person) who becomes a transferee prior
to or concurrently with the Acquiring Person or Adverse
Person becoming such and receives such Rights pursuant to
either (A) a direct or indirect transfer (whether or not
for consideration) from the Acquiring Person or Adverse
Person (or from an Associate of such Acquiring Person or
Adverse Person) to holders of equity interests in such
Acquiring Person or Adverse Person (or to holders of
equity interests in any Associate or Affiliate of such
Acquiring Person or Adverse Person) or to any Person with
whom the Acquiring Person or Adverse Person (or an
Associate or Affiliate of such Acquiring Person or
Adverse Person) has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (B)
a direct or indirect transfer which the Board of
Directors of the Company determines is part of a plan,
arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e),
shall, immediately upon the occurrence of a Triggering
Event and without any further action, be null and void
and no holder of such Rights shall have any rights
whatsoever with respect to such Rights whether under this
Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) are complied with, but
shall have no liability to any holder of a Rights
Certificate or to any other Person as a result of the
failure by it (including the Board of Directors of the
Company) to make any determinations with respect to an
Acquiring Person, an Adverse Person or their Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this
Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action
with respect to the registered holder of a Rights
Certificate upon the occurrence of any purported exercise
as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the
certificate contained in the form of election to purchase
set forth on the reverse side of the Rights Certificate
surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial
Owner (or former or proposed Beneficial Owner) thereof or
the Affiliates or Associates of such Beneficial Owner (or
former or proposed Beneficial Owner) as the Company shall
reasonably request.
(g) Notwithstanding any statement to the
contrary contained in this Agreement or in any Rights
Certificate, if the Distribution Date or the Stock
Acquisition Date shall occur prior to the Record Date,
the provisions of this Agreement, including without
limitation Sections 3 and 11(a)(ii), shall be applicable
to the Rights upon their issuance to the same extent such
provisions would have been applicable if the Record Date
were the date of this Agreement.
Section 8. Cancellation and Destruction of
Rights Certificates. All Rights Certificates surrendered
for the purpose of exercise, transfer, division,
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 cancelled form, or,
if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by the provisions
of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to
the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of
Common Stock.
(a) The Company covenants and agrees that
it will cause to be reserved and kept available at all
times out of its authorized and unissued shares of Common
Stock or its authorized and issued shares of Common Stock
held in its treasury (and, following the occurrence of a
Triggering Event, out of its authorized and unissued
shares of Common Stock and/or other securities or out of
its authorized and issued shares of Common Stock and/or
other securities held in its treasury) free from
preemptive rights or any right of first refusal, a
sufficient number of shares of Common Stock or Notes
(and, following the occurrence of a Triggering Event,
shares of Common Stock and/or other securities) to permit
the exercise in full of all Rights from time to time
outstanding.
(b) The Company further covenants and
agrees, so long as the Common Stock or Notes (and,
following the occurrence of a Triggering Event, shares of
Common Stock and/or other securities) issuable upon the
exercise of Rights may be listed on any national
securities exchange, to use its best efforts to cause,
from and after the time that the Rights become
exercisable, all such shares of Common Stock and all such
Notes (and such other securities) reserved for such
issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company further covenants and
agrees that it will take all such action as may be
necessary to ensure that all shares of Common Stock and
all Notes (and, following the occurrence of a Triggering
Event, shares of Common Stock and/or such other
securities) delivered upon the exercise of Rights shall,
at the time of delivery of the certificates for such
shares and of such Notes (and of such other securities),
subject to payment of the Purchase Price, be duly and
validly authorized and issued, fully paid, nonassessable,
freely tradeable, not subject to liens or encumbrances,
free of preemptive rights, rights of first refusal or any
other restrictions or limitations on the transfer or
ownership thereof, of any kind or nature whatsoever, and,
in the case of the Notes, valid, binding and enforceable.
(d) The Company further covenants and
agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be
payable in respect of the original issuance or delivery
of the Rights Certificates, any certificates for shares
of Common Stock or the Notes (and/or other securities, as
the case may be) upon the exercise of Rights. The
Company shall not, however, be required to (i) pay any
transfer tax which may be payable in respect of any
transfer involved in the issuance or delivery of any
Rights Certificate or the issuance or delivery of any
certificate for shares of Common Stock or Notes (and/or
other securities as the case may be) to a Person other
than, or in a name other than that of, the registered
holder of the Rights Certificate evidencing Rights
surrendered for exercise or (ii) transfer or deliver any
Rights Certificate or issue or deliver any certificate
for shares of Common Stock or any Notes (and/or other
securities as the case may be) upon the exercise of any
Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no
tax is due.
(e) The Company shall use its best
efforts to (i) prepare and file, as soon as practicable
following a Triggering Event on which the consideration
to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section
11(a)(iii) of this Agreement, or as soon as is required
by law following the Distribution Date, as the case may
be, a registration statement on an appropriate form under
the Securities Act with respect to the securities
purchasable upon exercise of the Rights, (ii) cause such
registration statement to become effective as soon as
practicable after such filing, and (iii) cause such
registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of
which Rights are no longer exercisable for such
securities and (B) the Expiration Date. The Company
shall also take such action as may be necessary under, or
to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the
exercise of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days after
the date set forth in clause (i) of the first sentence of
this paragraph of Section 9, the exercisability of the
Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any
such suspension, the Company shall make a public
announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been
obtained and until a registration statement has been
declared effective.
Section 10. Record Date for Securities Issued
Upon Exercise of Rights. Each Person in whose name any
certificate for shares of Common Stock and any Note
(and/or other securities, as the case may be) is issued
Upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such shares
of Common Stock and such Note (and/or other securities,
as the case may be) represented thereby on, and such
certificate and such Note shall be dated, the date upon
which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and
any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment
is a date upon which the Common Stock or Note (and/or
other securities, as the case may be) transfer books of
the Company are closed, such Person shall be deemed to
have become the record holder of such shares or such
Notes (and/or such other securities, as the case may be)
on, and such certificate or Note shall be dated, the next
succeeding Business Day on which the Common Stock or Note
(and/or other securities, as the case may be) transfer
books of the Company are open.
Section 11. Antidilution Adjustments. The
Purchase Price, the number and kind of securities, cash
and other property obtainable upon exercise of each Right
and the number of Rights outstanding shall be subject to
adjustment from time to time as provided in this Section
11.
(a) (i) In the event the Company shall at
any time on or after the date of this Agreement (A) pay a
dividend or make a distribution on the Common Stock
payable in shares of Common Stock, (B) subdivide (by a
stock split or otherwise) the outstanding Common Stock
into a larger number of shares, (C) combine (by a reverse
stock split or otherwise) the outstanding Common Stock
into a smaller number of shares, or (D) issue any cash,
securities or other property in a reclassification of the
Common Stock (including any such reclassification in
connection with a consolidation or merger in which the
Company is the surviving corporation), then in each such
event the Purchase Price and the redemption price set
forth in Section 23, as each is in effect at the time of
the record date for such dividend or distribution, or of
the effective date of such subdivision, combination or
reclassification, shall be proportionately adjusted by
multiplying the Purchase Price and such redemption price
by a fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding immediately
prior to the occurrence of such event and the denominator
of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of
such event. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section
11(a)(ii).
(ii) A "Triggering Event" shall
be deemed to occur in the event that:
(A) any Person shall have become
an Acquiring Person and the time period in
which the Board of Directors may redeem
the Rights pursuant to Section 23(a) shall
have expired; or
(B) the Board of Directors of
the Company shall declare any Person to be
an Adverse Person, upon a determination
that such Person, alone or together with
its Affiliates and Associates, has, at any
time after this Agreement has been filed
with the Securities and Exchange
Commission as an exhibit to a filing under
the Exchange Act, become the Beneficial
Owner of a number of shares of Common
Stock which the Board of Directors of the
Company determines to be substantial
(which number of shares shall in no event
represent less than 10% of the outstanding
shares of Common Stock) and a
determination by the Board of Directors of
the Company, after reasonable inquiry and
investigation, including consultation with
such persons as such directors shall deem
appropriate and consideration of such
factors as are permitted by applicable
law, that (a) such Beneficial Ownership by
such Person is intended to cause the
Company to repurchase the shares of Common
Stock beneficially owned by such Person or
to cause pressure on the Company to take
action or enter into a transaction or
series of transactions intended to provide
such Person with short-term financial gain
under circumstances where the Board of
Directors determines that the best long-
term interests of the Company would not be
served by taking such action or entering
into such transaction or series of
transactions at that time or (b) such
Beneficial Ownership is causing or
reasonably likely to cause a material
adverse impact (including, but not limited
to, impairment of relationships with
customers or impairment of the Company's
ability to maintain its competitive
position) on the business or prospects of
the Company, on the Company's
stockholders, employees, customers or
suppliers or on the communities in which
the Company operates or is located.
Upon each occurrence of a Triggering Event, proper
provision shall be made so that each holder of a
Right, except as otherwise provided in this
Agreement, shall thereafter have the right to
receive, upon exercise thereof at the then-current
Purchase Price in accordance with the terms of this
Agreement, in lieu of the number of Units receivable
upon exercise of a Right prior to the occurrence of
a Triggering Event, such number of shares of Common
Stock as shall equal the result obtained by (x)
multiplying the then-current Purchase Price by the
then number of one one-tenths of a share of Common
Stock for which a Right was then exercisable
(without giving effect to such Triggering Event) and
(y) dividing that product by 50% of the Current
Market Price per share of Common Stock immediately
after the first occurrence of a Triggering Event
(such number of shares being referred to as the
"Adjustment Shares"); provided, however, that if the
transaction or event that would otherwise give rise
to the foregoing adjustment is also subject to the
provisions of Section 13 of this Agreement, then
only the provisions of Section 13 of this Agreement
shall apply and no adjustment shall be made pursuant
to this Section 11(a)(ii).
(iii) In lieu of issuing shares
of Common Stock in accordance with Section
11(a)(ii) hereof, the Company may, if the Board
of Directors of the Company determines that
such action is necessary or appropriate and not
contrary to the interests of holders of Rights
(and, in the event that the number of shares of
Common Stock which are authorized by the
Company's certificate of incorporation but not
outstanding or reserved for issuance for
purposes other than upon exercise of the Rights
are not sufficient to permit the exercise in
full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section
11(a), the Company shall): (A) determine the
excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase
Price (such excess, the "Spread"), and (B) with
respect to each Right, make adequate provision
to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of
the Company (including, without limitation,
shares, or units of shares, of preferred stock
which the Board of Directors of the Company has
deemed to have the same value as shares of
Common Stock (such shares of preferred
stock-being referred to as "Common Stock
Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any
combination of the foregoing, having an
aggregate value equal to the Current Value,
where such aggregate value has been determined
by the Board of Directors of the Company based
upon the advice of a nationally recognized
investment banking firm selected by the Board
of Directors of the Company; provided, however,
if the Company shall not have made adequate
provision to deliver value pursuant to clause
(B) above within thirty (30) days following the
first occurrence of a Triggering Event, then
the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and
without requiring payment of the Purchase
Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which
shares and/or cash have an aggregate value
equal to the Spread. If the Board of Directors
of the Company shall so determine in its sole
discretion, the thirty (30) day period set
forth above may be extended to the extent
necessary, but not more than ninety (90) days
after the Triggering Event, in order that the
Company may seek stockholder approval for the
authorization of such additional shares (such
period, as it may be extended, the
"Substitution Period"). To the extent that the
Company determines that some action need be
taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y)
may suspend the exercisability of the Rights
until the expiration of the Substitution Period
in order to seek any authorization of
additional shares and/or to decide the
appropriate form of distribution to be made
pursuant to such first sentence and to
determine the value thereof. In the event of
any such suspension, the Company shall issue a
public announcement stating that the
exercisability of the Rights has been
temporarily suspended, as well as a public
announcement at such time as the suspension is
no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common
Stock shall be the Current Market Price per
share of the Common Stock on the date of the
Triggering Event and the value of any "Common
Stock Equivalents" shall be deemed conclusively
to have the same value as the Common Stock on
such date.
(b) If the Company shall at any time on
or after the date of this Agreement fix a record date for
the issuance of rights (other than the Rights), options
or warrants to holders of Common Stock entitling them to
subscribe for or purchase Common Stock or Equivalent
Shares (or securities convertible into Common Stock or
Equivalent Shares) at a price per share of Common Stock
or Equivalent Shares (or, in the case of a convertible
security, having a conversion price per share of Common
Stock or Equivalent Shares) less than the Current Market
Price per share of Common Stock on such record date, the
Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of
shares of Common Stock and Equivalent Shares (if any)
outstanding on such record date, plus the number of
shares of Common Stock or Equivalent Shares, as the case
may be, which the aggregate exercise and/or conversion
price for the total number of shares of Common Stock or
Equivalent Shares, as the case may be, which are
obtainable upon exercise and/or conversion of such
rights, options, warrants or convertible securities would
purchase at such Current Market Price, and the
denominator of which shall be the number of shares of
Common Stock and Equivalent Shares (if any) outstanding
on such record date, plus the number of additional shares
of Common Stock or Equivalent Shares, as the case may be,
which may be obtained upon exercise and/or conversion of
such rights, options, warrants or convertible securities.
In case such subscription price may be paid in a
consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
binding on the Rights Agent. Common Stock and Equivalent
Shares owned by or held for the account of the Company or
any subsidiary 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 issued following such
adjustment, the Purchase Price shall be readjusted to be
the Purchase Price which would have been in effect if
such record date had not been fixed.
(c) In case the Company shall at any time
after the date of this Agreement fix a record date for
the making of a distribution to holders of Common Stock
(including any such distribution made in connection with
a consolidation or merger in which the Company is the
surviving corporation) of securities (other than Common
Stock and rights, options or warrants referred to in
Section 11(b)), cash (other than a regular periodic cash
dividend at an annual rate not in excess of 250% of the
annual rate of the cash dividend paid on the Common Stock
during the immediately preceding fiscal year), property,
evidences of indebtedness, or assets, the Purchase Price
to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per
share of Common Stock 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 and the holders of
the Rights) of such securities, cash, property, evidences
of indebtedness or assets to be so distributed in respect
of one share of Common Stock, and the denominator of
which shall be such Current Market Price per share of
Common Stock on such record date. Such adjustments shall
be made successively whenever such a record date is
fixed; and in the event that such distribution is not
made following such adjustment, the Purchase Price shall
be readjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) Except as provided below, no
adjustment ill 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(d) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest
ten-thousandth of a share of Common Stock, as the case
may be. Notwithstanding the first sentence of this
Section 11(d), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three
years from the date of the transaction which requires
such adjustment or (ii) the Expiration Date.
(e) If, as a result of an adjustment made
pursuant to Section 11(a) or Section 13(a) of this
Agreement, the holder of any Right thereafter exercised
shall become entitled to receive any securities of the
Company other than shares of Common Stock, thereafter the
number of such other securities so receivable upon
exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable
to the provisions with respect to the shares of Common
Stock contained in this Section 11 and the provisions of
Sections 7, 9, 10, 12, 13 and 14 with respect to the
shares of Common Stock shall apply on like terms to any
such other securities.
(f) All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase
Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, one Unit consisting of that
number of fractional shares of Common Stock and a Note in
principal amount equal to that fraction of the Current
Market Price of the Common Stock on the date of exercise
or other securities, cash or other property purchasable
from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided in this
Agreement.
(g) Unless the Company shall have
exercised its election as provided in Section 11(h), upon
each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, (i) one Unit,
consisting of that number of fractional shares of Common
Stock (calculated to the nearest ten-thousandth of a
share of Common Stock) obtained by (A) multiplying the
number of shares of Common Stock covered by a Right
immediately prior to adjustment pursuant to this Section
11(g) by the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (B) dividing
the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price,
and (ii) one Note in principal amount equal to that
fraction (calculated to the nearest ten-thousandth) of
the Current Market Price of the Common Stock on the date
of exercise obtained by (A) multiplying Such fraction of
the Current Market Price as was applicable immediately
prior to the adjustment, by the Purchase Price in effect
immediately prior to such adjustment of the Purchase
Price, and (B) dividing the product so obtained by the
Purchase Price in effect immediately after such
adjustment of the Purchase Price
(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 an adjustment in the
number of shares of Common Stock purchasable upon the
exercise of a Right and the fraction of the Current
Market Price of the Common Stock on the date of exercise
used to evaluate the principal amount of the Note
purchased upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of
Rights shall be exercisable for one Unit consisting of
that number of shares of Common Stock and a Note in
principal amount equal to that fraction of the Current
Market Price of the Common Stock on the date of exercise
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 such adjustment by the
Purchase Price in effect immediately after such
adjustment. The Company shall make a public announcement
of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be
made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at
least 10 days after the date of the public announcement.
If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this
Section 11th) the Company shall, as promptly as
practicable, cause to be distributed to holders of record
of Rights Certificates on such record date a new Rights
Certificate evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of
record, in substitution and replacement for the Rights
Certificates held by such holders prior to the date of
adjustment and upon surrender thereof (if required by the
Company), new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such
adjustment. Rights Certificates to be so distributed
shall be issued, executed and countersigned in the manner
provided for in this Agreement (and may bear, at the
option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record
of Rights Certificates on the record date specified in
the public announcement.
(i) Irrespective of any adjustment or
change in the Purchase Price or the Units issuable upon
the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express
the Purchase Price per Unit and the number of Units which
were expressed in the initial Rights Certificates issued
hereunder.
(j) Before taking any action that would
cause an adjustment reducing the Purchase Price below the
then par value, if any, of the shares of Common Stock
issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable
shares of such Common Stock at such adjusted Purchase
Price.
(k) In any case in which this Section 11
shall require that an adjustment be made effective as of
a record date for a specified event, the Company may
elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such
record date the shares of Common Stock and Notes and
other securities, cash or property of the Company, if
any, issuable upon such exercise over and above the
shares of Common Stock and Notes and other securities,
cash or property of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due ▇▇▇▇ or
other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or
otherwise) or Notes or other securities, cash or property
upon the occurrence of the event requiring such
adjustment.
(l) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that
any combination or subdivision of the Common Stock,
issuance wholly for cash of any Common Stock at less than
the Current Market Price, issuance wholly for cash of
Common Stock or securities which by their terms are
convertible into or exchangeable or exercisable for
Common Stock, stock dividends or issuance of rights,
options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Common
Stock, shall not be taxable to such common stockholders.
(m) The Company covenants and agrees that
it shall not (i) consolidate with, (ii) merge with or
into, or (iii) directly or indirectly sell, lease, or
otherwise transfer or dispose of (in one transaction or a
series of related transactions) assets or earning power
aggregating more than 50% of the assets or earning power
of the Company and its subsidiaries taken as a whole, to
any other Person if (A) at the time of or immediately
after such consolidation, merger, sale, lease, transfer
or disposition there are any rights, warrants, securities
or other instruments outstanding or agreements in effect
which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (B)
prior to, simultaneously with or immediately after such
consolidation, merger, sale, lease, transfer or
disposition the shareholders (or equity holders) of the
Person who constitutes, or would constitute, the
Principal Party in such transaction shall have received a
distribution of Rights previously owned by such Person or
any of its Affiliates or Associates.
(n) The Company covenants and agrees
that, after the Stock Acquisition Date, it will not,
except as permitted by Section 23, 26 or 29 of this
Agreement, take any action if at the time such action is
taken it is reasonably foreseeable that such action will,
directly or indirectly, diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
(o) Anything in this Agreement to the
contrary notwithstanding, in the event that the Company
shall at any time prior to the Distribution Date (i) pay
a dividend or distribution on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of
shares, the number of Rights shall be proportionately
adjusted so that following any such event one Right shall
thereafter be associated with each share of Common Stock
then outstanding, or issued or delivered thereafter but
prior to the Distribution Date.
(p) The failure of the Board of Directors
to declare a Person to be an Adverse Person following
such Person becoming the Beneficial Owner of shares of
Common Stock representing 10% or more of the outstanding
shares of Common Stock shall not imply that such Person
is not an Adverse Person or limit the Board of Directors'
right at any time in the future to declare such Person to
be an Adverse Person.
(q) Anything in this Agreement to the
contrary notwithstanding, in the event that the Company
shall at any time after December 7, 1995 and prior to the
Distribution Date consolidate with, or merge with or
into, any other Person for the primary purpose of a
change of domicile of the Company, and, in connection
with such consolidation or merger, all of the outstanding
shares of Common Stock of the Company shall be changed
into or exchanged for shares of Common Stock of the
surviving corporation of such consolidation or merger
(the Surviving Corporation ), then proper provision
shall be made so that Rights shall be associated with
each share of Common Stock of the Surviving Corporation,
except as provided in Section 7(e) hereof, such that the
number of Rights associated with each share of Common
Stock of the Surviving Corporation following any such
event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common
Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock of
the Surviving Corporation which the shares of Common
Stock were changed into or exchanged for pursuant to the
consolidation or merger. Following such a consolidation
or merger, this Agreement shall remain in effect and all
references to the Company shall be deemed to be
references to the Surviving Corporation.
Section 12. Certification of Adjustments.
Whenever an adjustment is made as provided in Sections 11
and 13, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each
transfer agent for the Common Stock and each trustee
under the Indenture a copy of such certificate, and (c)
mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of
Common Stock) in accordance with Section 25.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) A "Business Combination" shall be
deemed to occur in the event that, following a Triggering
Event, (i) the Company shall, directly or indirectly,
consolidate with, or merge with and into, any other
Person (other than a subsidiary of the Company in a
transaction that complies with Section 11(m) and Section
11(n) of this Agreement), (ii) any Person (other than a
subsidiary of the Company in a transaction that complies
with Section 11(m) and Section 11(n) of this Agreement)
shall, directly or indirectly, consolidate with the
Company, or shall merge with and into the Company, in a
transaction in which the Company is the continuing or
surviving corporation of such merger or consolidation
and, in connection with such merger or consolidation, all
or part of the Common Stock shall be changed (including,
without limitation, any conversion into or exchange for
securities of the Company or of any other Person, cash or
any other property) (iii) the Company shall, directly or
indirectly, effect a share exchange in which all or part
of the Common Stock shall be changed (including, without
limitation, any conversion into or exchange for
securities of any other Person, cash or any other
property) or (iv) the Company shall, directly or
indirectly, sell, lease, exchange, mortgage, pledge or
otherwise transfer or dispose of (or one or more of its
subsidiaries shall directly or indirectly sell, lease,
exchange, mortgage, pledge or otherwise transfer or
dispose of), in one transaction or a series of related
transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company
and its subsidiaries (taken as a whole) to any other
Person (other than the Company or any of its subsidiaries
in one or more transactions each and all of which comply
with Section 11(m) and Section 11(n) of this Agreement).
In the event of a Business Combination, proper provision
shall be made so that each holder of a Right (except as
otherwise provided in this Agreement) shall thereafter
have the right to receive, upon the exercise thereof at
the then-current Purchase Price in accordance with the
terms of this Agreement, such number of shares of Common
Stock of the Principal Party as shall be equal to the
result obtained by (x) multiplying the then-current
Purchase Price by the number of one one-tenths of a share
of Common Stock for which a Right was then-exercisable
(without giving effect to the consummation of such
Business Combination) and (y) dividing that product by
50% of the Current Market Price per share of the Common
Stock of such Principal Party immediately prior to the
consummation of such Business Combination. All Common
Stock of any Person for which any Right may be exercised
after consummation of a Business Combination as provided
in this Section 13(a) shall, when issued upon exercise
thereof in accordance with this Agreement, be duly and
validly authorized and issued, fully paid, nonassessable,
freely tradeable, not subject to liens or encumbrances,
and free of preemptive rights, rights of first refusal or
any other restrictions or limitations on the transfer or
ownership thereof of any kind or nature whatsoever.
(b) After consummation of any Business
Combination, (i) the Principal Party shall be liable for,
and shall assume, by virtue of such Business Combination
and without the necessity of any further act, all the
obligations and duties of the Company pursuant to this
Agreement, (ii) the term "Company" as used in this
Agreement shall thereafter be deemed to refer to such
Principal Party, and (iii) such Principal Party shall
take all steps (including, but not limited to, the
reservation of a sufficient number of shares of its
Common Stock in accordance with Section 9) in connection
with such Business Combination as necessary to ensure
that the provisions of this Agreement shall thereafter be
applicable, as nearly as reasonably may be, in relation
to the shares of its Common Stock thereafter deliverable
upon the exercise of the Rights.
(c) The Company shall not consummate any
Business Combination unless prior thereto (i) the
Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been
issued or reserved for issuance (other than shares
reserved or issuance pursuant to this Agreement to the
holders of Rights) to permit the exercise in full of the
Rights in accordance with this Section 13, (ii) the
Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement
providing for the fulfillment of the Principal Party's
obligations and the terms as set forth in paragraphs (a)
and (b) of this Section 13 and further providing that, as
soon as practicable on or after the date of such Business
Combination, the Principal Party, at its own expense,
shall (A) prepare and file a registration statement on an
appropriate form under the Securities Act with respect to
the Rights and the securities purchasable upon exercise
of the Rights, (B) use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and remain effective (with
a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date, (C) deliver to
holders of the Rights historical financial statements for
the Principal Party and each of its Affiliates which
comply in all respects with the requirements for
registration on Form 10 under the Exchange Act, (D) use
its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be
necessary or appropriate, and (E) use its best efforts to
list the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange,
(iii) the Company and the Principal Party shall have
furnished to the Rights Agent an opinion of independent
counsel stating that such supplemental agreement is a
legal, valid and binding agreement of the Principal Party
enforceable against the Principal Party in accordance
with its terms, and (iv) the Company and the Principal
Party shall have filed with the Rights Agent a
certificate of a nationally recognized firm of
independent accountants setting forth the number of
shares of Common Stock of such issuer which may be
purchased upon the exercise of each Right after the
consummation of such Business Combination.
(d) The provisions of this Section 13
shall similarly apply to successive Business
Combinations. In the event a Business Combination shall
be consummated at any time after the occurrence of a
Triggering Event, the Rights which have not theretofore
been exercised shall thereafter be exercisable for the
consideration and in the manner described in Section
13(a). Following a Business Combination, the provisions
of Section 11(a)(ii) of this Agreement shall be of no
effect.
(e) Notwithstanding any other provision
of this Agreement, no adjustment to the number of shares
of Common Stock (or fractions of a share) or other
securities, cash or other property for which a Right is
exercisable or the number of Rights outstanding or
associated with each share of Common Stock or any similar
or other adjustment shall be made or be effective if such
adjustment would have the effect of reducing or limiting
the benefits the holders of the Rights would have had
absent such adjustment, including, without limitation,
the benefits under Sections 11 and 13, unless the terms
of this Agreement are amended so as to preserve such
benefits.
(f) The Company covenants and agrees that
it shall not effect any Business Combination if at the
time of, or immediately after such Business Combination,
there are any rights, options, warrants or other
instruments outstanding which would diminish or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(g) Without limiting the generality of
this Section 13, in the event the nature of the
organization of any Principal Party shall preclude or
limit the acquisition of Common Stock of such Principal
Party upon exercise of the Rights as required by Section
13(a) as a result of a Business Combination, it shall be
a condition to such Business Combination that such
Principal Party shall take such steps (including, but not
limited to, a reorganization) as may be necessary to
ensure that the benefits intended to be derived under
this Section 13 upon the exercise of the Rights are
assured to the holders thereof.
Section 14. Fractional Rights, Fractional
Shares and Fractional Notes.
(a) The Company shall not be required to
issue fractional Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu
of such fractional Rights, the Company may at its option
pay to the registered holders of the Rights Certificates
with respect 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 a Right for the Trading Day immediately prior to the
date on which such fractional Rights otherwise would have
been 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, Inc.
or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, Inc. 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 sale price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported on the Nasdaq Stock
Market or such other system then in use or, if on any
such date the Rights are not quoted by any such system,
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 Trading Day no such market maker
is making a market in the Rights, the current market
value of the Rights on such Trading Day shall be
determined in good faith by the Board of Directors of the
Company.
(b) The Company shall not be required to
issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. Fractions of
shares of Common Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to
an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement
shall provide that the holders of such depositary
receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial
owners of the Common Stock. In lieu of fractional shares
of Common Stock, the Company may at its option (i) issue
scrip or warrants in registered form (either represented
by a certificate or uncertificated) or in bearer form
(represented by a certificate) which shall entitle the
holder to receive a full share of Common Stock upon the
surrender of such scrip or warrants aggregating a full
share of Common Stock, or (ii) pay to the registered
holders of Rights Certificates at the time such Rights
Certificates are exercised as provided in this Agreement
an amount in cash equal to the same fraction of the
current market value of a share of Common Stock. For
purposes of this Section 14(b), the current market value
of a share of Common Stock shall be the closing price of
a share of Common Stock (as determined pursuant to the
second sentence of Section 1(j)) for the Trading Day
immediately prior to the date of such exercise.
(c) Notwithstanding anything to the
contrary contained herein, the Company shall not be
required to issue Notes in denominations other than $10
or integral multiples thereof and the Company may pay
cash in lieu of issuing Notes in denominations other than
$10 or integral multiples thereof in an amount equal the
difference between the principal amount of the Notes
otherwise issuable and the integral multiple of $10 which
is nearest to, but not in excess of, such amount.
(d) The holder of a Right by his
acceptance thereof expressly waives any right to receive
any fractional Rights or any fractional shares or any
fractional Notes upon exercise of a Right (except as
otherwise provided in this Agreement).
Section 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered
holders of associated Common Stock); and any registered
holder of any Rights Certificate (or, prior to the
Distribution Date, any share of associated Common Stock),
without the consent of the Rights Agent or of the holder
of any other Right, may, on his own behalf and for his
own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his rights
pursuant to this Agreement. Without limiting the
foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to
specific performance of the obligations under, and
injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders
Concerning Transfer and Ownership of Rights. Every
holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the
Rights will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the
Rights Certificates will be transferable on the registry
books of the Rights Agent only if surrendered at the
principal corporate trust office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of
transfer; and
(c) subject to Section 6(a) and Section
7(f) hereof, the Company and the Rights Agent may deem
and treat the Person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on
the Rights Certificate or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary.
Section 17. Rights Holder Not Deemed a
Stockholder. No holder, as such, of any Rights
Certificate shall be entitled to vote or to receive
dividends or distributions or shall be deemed for any
purpose the holder of Common Stock, of any Note or of any
other securities, cash or other property which may at any
time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained in this
Agreement or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company
or a holder of a Note, including, without limitation, any
right (i) to vote for the election of directors or upon
any matter submitted to stockholders at any meeting
thereof, (ii) to give or withhold consent to any
corporate action, (iii) to receive notice of meetings or
other actions affecting stockholders or holders of Notes
(except as provided in Section 24), (iv) to receive
dividends, distributions, subscription rights or payments
of principal and interest, (v) to institute, as a holder
of Common Stock or other securities issuable on exercise
of the Rights represented by any Rights Certificate, any
derivative action on behalf of the Company, or otherwise,
until and only to the extent that the Right or Rights
evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions of this
Agreement.
Section 18. Concerning the Rights Agent. The
Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other
disbursements incurred in the administration and
execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement,
including the costs and expenses of defending against any
claim of liability in the premises.
The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or
Note or for other securities of the Company, instrument
of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or
document reasonably believed by it to be genuine and to
be signed, executed and, when necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change
of Name of Rights Agent. Any corporation into which the
Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the corporate
trust business 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 document or any further act on the part of any of the
parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent
under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency
created by this Agreement any of the Rights Certificates
shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Rights
Certificate so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Rights Certificate either in the name of the
predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
In case at any time the name of the Rights
Agent shall be changed and at such time any of the Rights
Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The
Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter
(including, without limitation, the identity of any
Acquiring Person, Adverse Person or any Affiliate or
Associate of an Acquiring Person or Adverse Person or the
determination of Current Market Price) be proved or
established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other
evidence in respect thereof be specifically prescribed in
this Agreement) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman
of the Board of Directors of the Company, the President,
any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable
for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under
any responsibility in respect of the validity of this
Agreement or the execution and delivery of this Agreement
(except the due execution and delivery of this Agreement
by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any change
or adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in
Sections 3, 11, 13 or 23 or the ascertaining of the
existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of
any change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
shares of Common Stock or the authorization of any Notes
or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any
shares of Common Stock or other securities will, when
issued, be validly authorized and issued, fully paid and
nonassessable or any Notes will, when so issued, be
validly authorized and issued. binding and enforceable.
(f) The Company agrees that it will
perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the
carrying out or performance by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized
and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of
the Board of Directors of the Company, the President, any
Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions
of any such officer.
(h) The Rights Agent and any shareholder,
director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though the Rights
Agent were not serving as such under this Agreement.
Nothing in this Agreement shall preclude the Rights Agent
from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and
continued employment thereof.
(j) If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with
respect to such requested exercise or transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The
Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon
30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or
incapacitated Rights Agent or by any holder of a Rights
Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then
the registered holder of any Rights Certificate may apply
to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing
business under the laws of the United States or of the
State of Illinois (or of any other state of the United
States so long as such corporation is authorized to
conduct a corporate trust or banking business in the
State of Illinois) in good standing, having a principal
corporate trust office in the State of Illinois, which is
authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by
federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. After appointment, the
successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary
for such purpose. Not later than the effective date of
any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Stock, and mail a
notice thereof in writing to the registered holders of
the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the
Rights, Rights Agreement or the resignation or removal of
the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Rights
Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights Certificates to the
contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may
be approved by the Board of Directors of the Company to
reflect any adjustment or change in the Purchase Price
per share and the number or kind or class of securities,
cash or other property purchasable under the Rights
Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the
issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded as of
the Distribution Date, or upon the exercise, conversion
or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such
issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (ii) no
such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company
may, at its option, at any time prior to the earlier of
(i) the Close of Business on the tenth day following the
Stock Acquisition Date, and (ii) the Expiration Date,
redeem all but not less than all the then-outstanding
Rights at a redemption price of $.0025 per Right (as
adjusted from the initial redemption price of $.01 per
Right to reflect the Company's 100% stock dividends on
January 30, 1992 and October 31, 1989), appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this
Agreement (as amended)). Notwithstanding the foregoing,
the Board of Directors may not redeem any Rights
following a determination pursuant to Section
11(a)(ii)(B) that any Person is an Adverse Person. The
Company may, at its option, pay the redemption price in
cash, shares of Common Stock (based on the Current Market
Price of the Common Stock at the time of redemption) or
any other form of consideration deemed appropriate by the
Board of Directors.
(b) At the time and date of effectiveness
set forth in any resolution of the Board of Directors of
the Company ordering the redemption of the Rights,
without any further action and without any further
notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights
shall be to receive the redemption price; provided,
however, that such resolution of the Board of Directors
of the Company may be revoked, rescinded or otherwise
modified at any time prior to the time and date of
effectiveness set forth in such resolution. As soon as
practicable after the action of the Board of Directors of
the Company ordering the redemption of the Rights, the
Company shall give notice of such redemption to the
Rights Agent and to the holders of the then-outstanding
Rights by mailing such notice to all such holders at
their last addressees as they appear upon the registry
books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner
provided in this Agreement shall be deemed given, whether
or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment
of the redemption price will be made. In any case,
failure to give such notice by mail, or any defect in the
notice, to any particular holder of Rights shall not
affect the sufficiency of the notice to other holders of
Rights. Neither the Company nor any of its Affiliate or
Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that
specifically set forth in this Section 23, and other than
in connection with the purchase of shares of Common Stock
prior to the Distribution Date.
Section 24. Notice of Certain Events. In case
the Company, on or after the Distribution Date, shall
propose to (a) pay any dividend payable in stock of any
class to the holders of its Common Stock or to make any
other distribution to the holders of its Common Stock
(other than a regular periodic cash dividend at an annual
rate not in excess of 250% of the annualized rate of the
cash dividend paid on the Common Stock during the
immediately preceding fiscal year), or (b) offer to the
holders of its Common Stock rights, options, or warrants
to subscribe for or to purchase any additional shares of
Common Stock or shares of stock of any class or any other
securities, rights or options, or (c) effect any
reclassification of its Common Stock (other than a
reclassification involving only the subdivision of
outstanding shares of Common Stock, a change in the par
value of such Common Stock or a change from par value to
no par value), or (d) directly or indirectly effect any
consolidation or merger into or with, or effect any sale,
lease, exchange, or other transfer or disposition (or to
permit one or more of its subsidiaries to effect any
sale, lease, exchange or other transfer or disposition),
in one transaction or a series of related transactions,
of more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) to, any
other Person, or (e) effect the liquidation, dissolution
or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in
accordance with Section 25, a notice of such proposed
action, which shall specify any record date for the
purposes of such stock dividend or distribution of
rights, or the date on which such reclassification,
consolidation, merger, sale, lease, exchange, transfer,
disposition, liquidation, dissolution, or winding up is
to take place and the date of participation therein by
the holders of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of
any action covered by clause (a) or (b) above at least 20
days prior to the record date for determining holders of
the Common Stock for purposes of such action, and in the
case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the
date of participation therein by the holders of Common
Stock, whichever shall be the earlier. Notwithstanding
anything in this Agreement to the contrary, prior to the
Distribution Date a filing by the Company with the
Securities and Exchange Commission shall constitute
sufficient notice to the holders of securities of the
Company, including the Rights, for purposes of this
Agreement and no other notice need be given. The failure
to give notice as required by this Section 24 or any
defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any
such action.
In case any Triggering Event shall occur, then,
in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Rights
Certificate, in accordance with Section 25, a notice of
the occurrence of such Triggering Event, which shall
specify the Triggering Event and a description of the
consequences of such Triggering Event to holder of Rights
under Section 11(a)(ii).
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 Rights Certificate
to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the
Rights Agent) as follows:
Great Lakes Chemical Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made
by the Company or by the holder of any Rights Certificate
to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with
the Company) as follows:
▇▇▇▇▇▇ Trust Company of New York
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the
holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the
Company.
Section 26. Supplements and Amendments.
(a) At any time prior to the Close of
Business on the tenth day following the Stock Acquisition
Date, the Company may, except as provided in Section
26(c), and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this
Agreement without the approval of any holder of the
Rights.
(b) After the Close of Business on the
tenth day following the Stock Acquisition Date, the
Company may, except as provided in Section 26(c), and the
Rights Agent shall if the Company so directs, amend this
Agreement without the approval of any holders of Rights
Certificates (i) to cure any ambiguity, (ii) to correct
or supplement any provision contained in this Agreement
which may be defective or inconsistent with any other
provision of this Agreement, or (iii) to change or
supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders
of Rights Certificates (other than an Acquiring Person,
Adverse Person or an Affiliate or Associate of an
Acquiring Person or Adverse Person).
(c) No supplement or amendment to this
Agreement shall be made which changes the Purchase Price,
the number of fractional shares of Common Stock, Units
(or the calculation of the principal amount or interest
rate of the Notes constituting such Units), other
securities, cash or other property for which a Right is
then exercisable or the redemption price or provides for
an earlier Expiration Date, except that prior to the
Close of Business on the tenth day following the Stock
Acquisition Date, any such amendment may substitute
Common Stock, a fraction of a share of preferred stock,
debt securities, or a combination thereof for such Common
Stock and Notes constituting such Units if such shares of
Common Stock, fraction of a share of preferred stock,
debt securities or combination thereof shall equal, in
the sole discretion of the Board of Directors of the
Company, the then Current Market Price of a share of
Common Stock, and any such amendment effecting such
substitution may amend any such provision of this
Agreement, including without limitation the adjustment
provisions of Section 11, to reflect appropriately such
substitution, or to restate this Agreement in its
entirety to reflect appropriately such substitution.
(d) Immediately upon the action of the
Board of Directors providing for any amendment or
supplement pursuant to this Section 26, and without any
further action and without notice, such amendment or
supplement shall be deemed effective. Promptly following
the adoption of any amendment or supplement pursuant to
this Section 26, the Company shall deliver to the Rights
Agent a copy, certified by the Secretary or any Assistant
Secretary of the Company, of resolutions of the Board of
Directors of the Company adopting such amendment or
supplement. Upon such delivery, the amendment or
supplement shall be administered by the Rights Agent as
part of this Agreement in accordance with the terms of
this Agreement, as so amended or supplemented.
Section 27. Exchange.
(a) The Board of Directors of the Company
may, at its option, at any time and from time to time
after the first occurrence of a Triggering Event,
exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock or Equivalent
Shares, or any combination thereof, at an exchange ratio
of one share of Common Stock or one Equivalent 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"). Notwithstanding
the foregoing, the Board of Directors may not effect such
exchange at any time after any Person (other than the
Company, any subsidiary of the Company or any employee
benefit plan of the Company or such subsidiary), together
with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common
Stock then outstanding.
(b) Immediately upon the action of the
Board of Directors of the Company ordering the exchange
of any Rights pursuant to subsection (a) of this Section
27 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be
to receive that number of shares of Common Stock and/or
Equivalent Shares equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice that is
mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by
which the exchange of the shares of Common Stock and/or
Equivalent Shares for Rights will be effected and, in the
event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that the number of
shares of Common Stock that are authorized by the
Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to
permit an exchange of Rights as contemplated in
accordance with this Section 27, the Company may, at its
option, take all such action as may be necessary to
authorize additional shares of Common Stock for issuance
upon exchange of the Rights.
(d) The Company shall not be required to
issue fractions of shares of Common Stock or to
distribute certificates that evidence fractional shares
of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered
holders of Rights, with regard to which such fractional
shares of Common Stock would otherwise be issuable, an
amount in cash equal to the same fraction of the value of
a whole share of Common Stock. For purposes of this
Section 27, the value of a whole share of Common Stock
shall be the closing price (as determined pursuant to the
second sentence of the definition of Current Market
Price) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 27, and the value of
any Equivalent Share shall be deemed to have the same
value as the Common Stock on such date.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and
the registered holders of Rights any legal or equitable
right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders
of the Rights.
Section 30. Severability.
(a) If any term, provision, covenant or
restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way
be affected, impaired or invalidated; provided, however,
that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors
of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close
of business on the tenth day following the date of such
determination by the Board of Directors.
(b) If legal counsel to the Company
delivers to the Company a written opinion to the effect
that, as a result of changes in federal law or Delaware
law, any term, provision, covenant or restriction of this
Agreement may be invalid, void, or unenforceable, then,
notwithstanding any other provision of this Agreement,
the Company and the Rights Agent may amend this Agreement
to modify, revise or delete such term, provision,
covenant or restriction to the extent necessary to comply
with such law as so changed.
Section 31. Governing Law. This Agreement and
each Rights Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and
construed in accordance with the internal laws of such
state applicable to contracts to be made and performed
entirely within such State.
Section 32. Counterparts. This Agreement may
be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or
affect the meaning or construction of any of the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Great Lakes Chemical
Corporation
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
ATTEST:
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Corporate Secretary
▇▇▇▇▇▇ Trust Company of New
York
By /s/ ▇. ▇. ▇▇▇▇▇▇▇
Title: Vice President
ATTEST:
By /s/ ▇. ▇. ▇▇▇▇
Title: Assistant Secretary
Exhibit A
[Form of Rights Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 7, 1999
OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE
IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT.
[THE RIGHTS REPRESENTED BY THIS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS
OR BECAME AN ACQUIRING PERSON, ADVERSE PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS
CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.]
Rights Certificate
GREAT LAKES CHEMICAL CORPORATION
This certifies that, __________________________
or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of September
7, 1989, as amended from time to time (the "Rights
Agreement"), between Great Lakes Chemical Corporation, a
Delaware corporation (the "Company"), and ▇▇▇▇▇▇ Trust
Company of New York (the "Rights Agent"), unless notice
of redemption shall have been previously given by the
Company, 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 time)
on September 22, 1999 at the principal corporate trust
office of the Rights Agent, or at the office of its
successor as Rights Agent, one Unit, consisting of
one-tenth of a share of the Common Stock, par value $1.00
per share, of the Company, and one note in the principal
amount equal to nine-tenths of the Current Market Price
(as defined in the Rights Agreement) of a share of Common
Stock, at a purchase price of $92.50 per Unit (subject
to further adjustment) upon presentation and surrender of
this Rights Certificate with the Form of Election to
Purchase duly executed. The notes forming part of the
Units are issuable under, and subject to the terms and
conditions of, an Indenture, dated as of September 7,
1989 (the "Indenture") between the Company and Bank of
Montreal Trust Company, as Trustee. The Purchase Price
may be paid in cash or by certified bank check or money
order payable to the order of the Company.
The number of Rights evidenced by this Rights
Certificate (and the amount of securities constituting a
Unit which may be purchased Upon exercise thereof) set
forth above and the Purchase Price set forth above have
been determined as of , 199 , based on the
Common Stock of the Company as constituted at such date.
As provided in the Rights Agreement, the Purchase Price
and the number of Units, shares of Common Stock, other
securities, cash or other property which may be purchased
upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment
upon the happening of certain events.
If the Rights evidenced by this Rights
Certificate are or were formerly beneficially owned, on
or after the earlier of the Distribution Date and the
Stock Acquisition Date, by an Acquiring Person, Adverse
Person or an Affiliate, Associate or direct or indirect
transferee of an Acquiring Person or Adverse Person, such
Rights may become null and void and the holder of any
such Right (including any subsequent holder) shall not
have any right with respect to such Right.
This Rights Certificate is subject to all of
the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby
made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the
Rights Certificates. Capitalized terms used in this
Certificate have the same meanings as such terms are
defined in the Rights Agreement. Copies of the Rights
Agreement and the Indenture are on file at the principal
executive offices of the Company and the above-mentioned
office of the Rights Agent.
This Rights Certificate, with or without other
Rights Certificates, upon surrender at the principal
corporate trust office of the Rights Agent, may be
exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number
of shares of Units or other property as the Rights
evidenced by the Rights Certificate or Rights
Certificates surrendered entitled such holder to
purchase. If this Rights Certificate shall be exercised
in part. The holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not
exercised. Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate may
be redeemed by the Company at its option at a redemption
price of $.0025 per Right, subject to further adjustment,
at any time prior to the Close of Business on the tenth
day after the Stock Acquisition Date.
No fractional shares of Common Stock are
required to be issued upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof the Company
may elect to (i) evidence fractional shares by depositary
receipts, (ii) issue scrip or warrants in registered form
(either represented by a certificate or uncertificated)
or in bearer form (represented by a certificate) which
shall entitle the holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full
share or (iii) make a cash payment, as provided in the
Rights Agreement.
No holder of this Rights Certificate, as such,
shall be entitled to vote or to receive dividends or
shall be deemed for any purpose the holder of Common
Stock or of any other securities, cash or property which
may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or this
Certificate be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of
the Company, including, without limitation, 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 to institute, as a holder of Common Stock or
other securities issuable on the exercise of the Rights
represented by this Certificate, any derivative action,
or otherwise, until and only to the extent the Right or
Rights evidenced by this Rights Certificate shall have
been exercise as provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal. Dated as
of ___________ __, 19__.
GREAT LAKES CHEMICAL
CORPORATION
By
Title
ATTEST:
Secretary
Countersigned:
By
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificates.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably
constitute and appoint Attorney, to transfer the within
Rights Certificate on the books of the within-named
Company, with full Dower of substitution.
Dated: ______________, 19__
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.
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(l) this Rights Certificate [ ] is [ ] is
not being sold, assigned and transferred by or on behalf
of a Person who is or was an Acquiring Person, Adverse
Person or an Affiliate or Associate of any such Acquiring
Person or Adverse Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate
from any Person who is or was an Acquiring Person,
Adverse Person or an Affiliate or Associate of an
Acquiring Person or Adverse Person.
Dated: _____________, 19__
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.
Notice
The signature to the foregoing Assignment must
correspond to the name as written upon the face of this
Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above
in the Form of Assignment is not completed, the Company
will deem the beneficial owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person, Adverse
Person or an Affiliate or Associate thereof (as defined
in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any
Right Certificate issued in exchange for this Right
Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights represented by this Rights Certificate)
To: Great Lakes Chemical Corporation
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Rights
Certificate to purchase the shares of Common Stock or
other securities, cash or other property issuable upon
the exercise of such Rights and requests that
certificates for such shares or other securities be
issued in the name of, and such cash or other property be
paid to:
Please insert social security or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights
Certificate for the remaining balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
(Please print name and address)
Dated: ______________, 19__
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Rights Certificate)
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.
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not
being exercised by or on behalf of a Person who is or was
an Acquiring Person, Adverse Person or an Affiliate or
Associate of any such Acquiring Person or Adverse Person
(as such terms are defined pursuant to the Rights
Agreement):
(2) after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate
from any Person who is or was an Acquiring Person,
Adverse Person or an Affiliate or Associate of an
Acquiring Person or Adverse Person.
Dated: ___________, 19__
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.
Notice
The signature on the foregoing Form of Election
to Purchase and Certificate must correspond to the name
as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or
any change whatsoever.
In the event the certification set forth above
in the Form of Election is not completed, the Company
will deem the beneficial owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person, Adverse
Person or an Affiliate or Associate thereof (as defined
in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any
Right Certificate issued in exchange for this Right
Certificate.
(NOT AMENDED)
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK AND NOTES
On September 7, 1989, the Board of Directors of
Great Lakes Chemical Corporation, a Delaware corporation
(the "Company"), declared a dividend of one common stock
and note purchase right (a "Right") for each outstanding
share of Common Stock, $l.00 par value, of the Company
(the "Common Stock"). The dividend is payable on
September 22, 1989 (the "Record Date") to stockholders of
record at the close of business on the Record Date, and
with respect to all shares of Common Stock that become
outstanding after the Record Date and prior to the
earliest of the Distribution Date (as defined below), the
redemption of the Rights and the expiration of the
Rights. Except as set forth below and subject to
adjustment as provided in the Rights Agreement (as
defined below), each Right entitles the registered holder
to purchase from the Company one Unit, consisting
initially of one-tenth share of Common Stock and one Note
in the principal amount equal to nine-tenths of the
current market price of the Common Stock on the date of
exercise, at an exercise price of $370 per Right (the
"Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement dated as of
September 7, 1989 (the "Rights Agreement"), between the
Company and ▇▇▇▇▇▇ Trust Company of New York, as Rights
Agent (the "Rights Agent"). The Notes are issuable
under, and subject to the terms and conditions of, an
Indenture (the "Indenture") between the Company and Bank
of Montreal Trust Company, as Trustee.
The Rights will be evidenced by Common Stock
certificates and not by separate certificates until the
tenth day following the earlier of (i) the date of public
disclosure that a person or group (an "Acquiring
Person"), together with persons affiliated or associated
with it, has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding
Common Stock (the "Stock Acquisition Date") and (ii) the
commencement or disclosure of an intention to commence, a
tender offer or exchange offer by a person other than the
Company and certain related entities if, upon
consummation of the offer, such person or group, together
with persons affiliated or associated with it, could
acquire beneficial ownership of 15% or more of the
outstanding Common Stock (the earlier of such dates being
called the "Distribution Date"). Until the Distribution
Date (or earlier redemption or expiration of the Rights),
the Rights will be transferable with and only with the
Common Stock (except in connection with redemption of the
Rights). Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer,
replacement or new issuance of Common Stock will contain
a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender
for transfer of any certificates for Common Stock will
also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
As soon as practicable following the
Distribution Date, separate certificates evidencing the
Rights ("Rights Certificates") will be mailed to holders
of record of the Common Stock as of the close of business
on the Distribution Date. From and after the
Distribution Date, such separate Right Certificates alone
will evidence the Rights.
The Rights will first become exercisable on the
Distribution Date (unless sooner redeemed). The Rights
will expire at the close of business on September 22,
1999 (the "Expiration Date"), unless earlier redeemed by
the Company as described below.
The Purchase Price is subject to adjustment
from time to time to prevent dilution (i) in the event of
a stock dividend or distribution on, or a subdivision,
combination or reclassification of, the Common Stock,
(ii) upon the grant to holders of the Common Stock of
certain rights, options, or warrants to subscribe for
Common Stock or securities convertible into Common Stock
at less than the current market price of the Common
Stock, or (iii) Upon the distribution to holders of the
Common Stock of other securities, cash (excluding regular
periodic cash dividends at an annual rate not in excess
of 250% of the annualized rate of cash dividends paid
during the preceding fiscal year), property, evidences of
indebtedness, or assets.
If a person acquires beneficial ownership of
15% or more of the Common Stock and the Company does not
thereafter redeem the Rights in the time and manner
permitted (such acquisition, upon the expiration of the
permitted redemption period, is referred to herein as a
"Triggering Event"), then the Rights will "flip-in" and
entitle each holder of a Right, except as provided below,
to purchase, upon exercise at the then-current Purchase
Price, that number of shares of Common Stock having a
market value of two times such Purchase Price.
Any Rights beneficially owned at any time on or
after the earlier of the Distribution Date and the Stock
acquisition Date by an Acquiring Person or an affiliate
or associate of an Acquiring Person (whether or not such
ownership is subsequently transferred) will become null
and void upon the occurrence of a Triggering Event, and
any holder of such Rights will have no right to exercise
such Rights.
In the event that, following a Triggering
Event, the Company is acquired in a merger or other
business combination in which the Common Stock does not
remain outstanding or is changed or 50% or more of its
consolidated assets or earning power is sold, leased,
exchanged, mortgaged, pledged or otherwise transferred or
disposed of (in one transaction or a series of related
transactions) the Rights will "flip-over" and entitle
each holder of a Right to purchase, upon the exercise of
the Right at the then-current Purchase Price, that number
of shares of common stock of the acquiring company (or,
in certain circumstances, one of its affiliates) which at
the time of such transaction would have a market value of
two times such Purchase Price.
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such
Purchase Price. Holders will have no right to receive
fractional shares of Common Stock or Notes (other than
fractions which are in denominations of $10 or integral
multiples thereof) upon the exercise of Rights. In lieu
of such fractional shares or Notes, an adjustment in cash
may be made based on the market price of the Common Stock
on the last trading date prior to the date of exercise,
or the Company may issue script, warrants or depositary
receipts.
At any time prior to the earlier of (i) ten
days following the Stock Acquisition Date, (ii) the
Expiration Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right,
subject to adjustment. Immediately upon the action of
the Company's Board of Directors electing to redeem the
Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights thereafter
will be to receive the applicable redemption price. The
Rights may not be exercised prior to the expiration of
the right to redeem.
Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder or
noteholder of the Company, including, without limitation,
the right to vote or to receive dividends or
distributions or payments of principal or interest.
At any time prior to ten days following the
Stock Acquisition Date, the Company may, without the
approval of any holder of the Rights, supplement or amend
any provision of the Rights Agreement (including the date
on which the Distribution Date will occur). Thereafter,
the Rights Agreement may be amended only to cure
ambiguities, to correct inconsistent provisions, or in
ways that do not adversely affect the Rights holders.
The Rights Agreement may not be amended to change the
Purchase Price, the number of shares of Common Stock,
other securities, cash or other property obtainable upon
exercise of a Right, the redemption price, or the
Expiration Date, except that, prior to ten days following
the Triggering Event, the Rights Agreement may be amended
to substitute other securities for the Unit otherwise
obtainable upon exercise of a Right, provided the value
of such securities is equal to the then current market
price of one share of Common Stock.
The Rights have certain anti-takeover effects.
The Rights may cause substantial dilution to a person or
group that attempts to acquire the Company on terms not
approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number
of Rights being acquired. The Rights should not
interfere with any merger or other business combination
approved by the Company's Board of Directors prior to the
time a person or group has acquired beneficial ownership
of 15% or more of the Common Stock, because until such
time the Rights may be redeemed by the Company.
On September 7, 1989, the Company declared a
two-for-one stock split in the form of a 100% stock
dividend to holders of record of the Common Stock on
October 6, 1989. As a result of such dividend, pursuant
to the terms of the Rights Agreement the Purchase Price
will be adjusted to $185 and the price at which the
Rights may be redeemed will be adjusted to $.005 per
Right, in each case as of the October 6, 1989 record date
for the stock split.
Copies of the Rights Agreement and the
Indenture will be filed with the Securities and Exchange
Commission as an Exhibit to the Company's registration
statement on Form 8-A. Copies of the Rights Agreement
and the Indenture will be available free of charge from
the Company. This summary description of the Rights and
the Notes does not purport to be complete and is
qualified in its entirety by reference to the Rights
Agreement and the Indenture, which are hereby
incorporated herein by reference.