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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
UNION CAMP CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 13-5652423
(State of incorporation or organization) IRS Employer Identification No.
1600 Valley Road, Wayne, New Jersey 07470
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Rights to Purchase Shares of New York Stock Exchange
Series A Junior Participating Pacific Stock Exchange
Preferred Stock, par value
$1.00 per share
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
On November 28, 1995, the Board of Directors of Union Camp
Corporation, a corporation organized under the laws of Virginia (the
"Company"), declared a dividend distribution as of the Close of Business on
February 26, 1996, of one Right for each outstanding share of common stock,
par value $1.00 per share (the "Common Stock"), of the Company to
stockholders of record at the Close of Business on February 15, 1996 (the
"Record Date"). Each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred Stock") at a
price (the "Purchase Price") of $175 per one-thousandth of a share of
Preferred Stock (such fraction, the "Preferred Stock Fraction"), subject to
adjustment. The Purchase Price shall be paid, at the option of the holder,
in cash or by certified bank check or money order payable to the order of
the Company, or shares of Common Stock having a value at the time of
exercise equal to the Purchase Price. The description and terms of the
Rights are set forth in the Rights Agreement between the Company and The
Bank of New York, as Rights Agent, dated as of January 25, 1996, as amended
and restated on June 25, 1996 (the "Rights Agreement"). The term "Close of
Business" means 5:00 p.m., New York City time.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
certificates evidencing the Rights (the "Rights Certificates") will be
distributed. The Rights will separate from the Common Stock and a
distribution of the Rights Certificates will occur (the "Distribution
Date") upon the earlier of (i) ten days after the public announcement by
the Company or an acquiring person that a person or group of affiliated or
associated persons other than an Exempt Person (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the "Stock Acquisition
Date"), or (ii) 10 business days (or such later date as may be determined
by the Company's Board of Directors prior to such time as any person
becomes an Acquiring Person) following the commencement of a tender offer
or exchange offer that would result in a person or group beneficially
owning 15% or more of such outstanding shares of Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for
Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
Exempt Person means (x) any Person who would otherwise be an
Acquiring Person, whom the Board of Directors of the Company determines in
good faith has become such inadvertently (including, without limitation,
because (A) such person was unaware that he or it beneficially owned a
percentage of Common Stock that would otherwise cause such person to be an
Acquiring Person or (B) such Person was aware of the extent of his or its
beneficial ownership but had no actual knowledge of the consequences of
such beneficial ownership under the Rights Agreement) and if such person,
either prior to or as promptly as practicable after being advised of such
determination, divests himself or itself of beneficial ownership of a
sufficient number of shares of Common Stock so that such Person would no
longer be an Acquiring Person, in which case such Person shall not be
deemed to be or to have become an Acquiring Person for any purposes of the
Rights Agreement or (y) any
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Person designated as an Exempt Person by the Board of Directors pursuant to
an amendment to the Rights Agreement described below.
The Rights are not exercisable until the Distribution Date and
will expire at the Close of Business on February 26, 2006, unless earlier
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the Close of Business on the Distribution Date, and thereafter such
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a Stock Acquisition Date shall occur, the
Rights Agreement provides that proper provision shall be made so that each
holder of a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise
price of the Right. Alternatively, if the Rights become exercisable as set
forth in this paragraph, the Company by action of the majority of its Board
of Directors may provide that each Right shall be exchanged for one share
of Common Stock upon the surrender to the Company of the Rights so
exercised and without other payment of the Purchase Price; provided that
the Board of Directors shall not be able to effect such exchange at any
time after any Person (other than the Company or certain other related
parties), together with all Affiliates and Associates of such Person,
beneficially own 50% or more of the shares of Common Stock then
outstanding. The only right of a holder of Rights following the Company's
election to provide for such exchange shall be to receive the above-
described securities. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Rights
that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
For example, at an exercise price of $175 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder to
purchase $350 worth of Common Stock (or other consideration, as noted
above) for $175. Assuming that the Common Stock had a per share value of
$70 at such time, the holder of each valid Right would be entitled to
purchase five shares of Common Stock for $175. Alternatively, the Company
could permit the holder to surrender each Right in exchange for one share
of Common Stock (with a value of $70) without the payment of any
consideration other than the surrender of the Right.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company engages in a merger or consolidation with another person in which
the Company is the surviving corporation, but in which all or part of its
Common Stock is changed or exchanged, (iii) the Company is a partner to a
statutory share exchange with any person after which the Company is a
subsidiary of any other person or (iv) 50% or more of the Company's assets
or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to twice the exercise price of the
Right.
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The Purchase Price payable, and the number of Preferred Stock
Fractions or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock or other capital stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or other capital stock or convertible
securities at less than the current market price of the Preferred Stock or
other capital stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share)
will be issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
At any time prior to the earlier of (i) the date on which a
Section 11(a)(ii) Event occurs and (ii) the Expiration Date, the Board of
Directors of the Company may redeem the Rights, in whole but not in part,
at a price of $0.001 per Right, payable in cash or securities or both (the
"Redemption Price"). Immediately upon the action of the Board of Directors
of the Company ordering redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board of Directors in order to cure any ambiguity, to
designate as an Exempt Person any person who (A) is permitted to report
beneficial ownership of securities (including Common Stock) on Schedule 13G
promulgated under the Securities Exchange Act of 1934, as amended and
(B) to the extent required by the Board of Directors of the Company
(i) agrees to reduce its beneficial ownership below 15% in a manner
satisfactory to the Board of Directors of the Company and does so reduce
its beneficial ownership or (ii) agrees to such conditions to retaining
beneficial ownership as the Board of Directors of the Company (in its sole
discretion) deems necessary or advisable (which designation shall be deemed
not to adversely affect the interests of the holders of Rights
Certificates), and to make such other changes which do not adversely affect
the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, no amendment to adjust the time period
governing redemption may be made at such time as the Rights are not
redeemable.
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As of January 31, 1996 there were 69,118,273 shares of Common
Stock outstanding, 0 shares in the treasury, and 4,854,157 shares reserved
for issuance under stock option plans. Each outstanding share of Common
Stock on February 15, 1996 will receive one Right. As long as the Rights
are attached to the shares of Common Stock and in certain other limited
circumstances, the Company will issue one Right with each new share of
Common Stock so that all such shares will have attached rights. 125,000
shares of Preferred Stock will initially be reserved for issuance upon
exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
the Company without conditioning the offer on the Rights being redeemed or
a substantial number of Rights being acquired. The Rights should not
interfere with any merger or other business combination approved by the
Board of Directors of the Company.
This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is attached herewith as an exhibit and is incorporated
herein by reference in its entirety.
Item 2. Exhibits.
Exhibit No. Description
(1) Rights Agreement, dated as of January 25, 1996, as
amended and restated as of June 25, 1996, between the
Union Camp Corporation and The Bank of New York as
Rights Agent.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized.
UNION CAMP CORPORATION
By: /s/ Dirk R. Soutenkijk
Name: Dirk R. Soutendijk
Title: Vice-President,
Secretary & General
Counsel
Date: June 25, 1996
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EXHIBIT INDEX
Exhibit No. Description
(1) Rights Agreement, dated as of
January 25, 1995, as amended and
restated as of June 25, 1996,
between the Union Camp Corporation
and The Bank of New York as Rights
Agent.
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Exhibit 1
___________________________________________________________________________
UNION CAMP CORPORATION
and
THE BANK OF NEW YORK
Rights Agent
________________
Rights Agreement
Dated as of January 25, 1996, as amended
and restated as of June 25, 1996
___________________________________________________________________________
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . 5
Section 3. Issue of Rights Certificates . . . . . . . . . . . . . . . 6
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . 8
Section 5. Countersignature and Registration . . . . . . . . . . . . . 9
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights
Certificates . . . . . . . . . . . . . . . . . . . . . 10
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights . . . . . . . . . . . . . . . . . . . . 11
Section 8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . . . . . 14
Section 9. Reservation and Availability of Capital Stock;
Registration of Securities . . . . . . . . . . . . . . 14
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . 16
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights . . . . . . . . . . . . 16
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . . . . . . . 28
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . . . 28
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . 31
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Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . 33
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . 33
Section 17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . . . 34
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . 34
Section 19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . . 35
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . 36
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . 39
Section 22. Issuance of New Rights Certificates . . . . . . . . . . . 40
Section 23. Redemption and Termination . . . . . . . . . . . . . . . . 40
Section 24. Notice of Certain Events . . . . . . . . . . . . . . . . . 41
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 26. Supplements and Amendments . . . . . . . . . . . . . . . . 43
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 28. Determinations and Actions by the Board of
Directors, etc. . . . . . . . . . . . . . . . . . . . 44
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . 44
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . 45
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . 45
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 45
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . 45
Exhibit A -- Form of Articles of Amendment
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 25, 1996, as amended and
restated as of June 25, 1996 (the "Agreement"), between Union Camp
Corporation, a Virginia corporation (the "Company"), and The Bank of New
York, a New York banking corporation (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on November 28, 1995, the Board of Directors of the
Company authorized and declared a dividend distribution as of the Close of
Business (as hereinafter defined) on February 26, 1996 (the "Effective
Date") of one Right for each share of common stock, par value $1.00 per
share, of the Company (the "Common Stock") outstanding at the Close of
Business on February 15, 1996 (the "Record Date"), and has authorized the
issuance of one Right (as such number may be hereinafter adjusted pursuant
to the provisions of Section 11(p) hereof) for each share of Common Stock
of the Company issued or delivered between the Record Date and the
Distribution Date, each Right initially representing the right to purchase
one Preferred Stock Fraction (as hereinafter defined), upon the terms and
subject to the conditions hereinafter set forth (individually a "Right" and
collectively the "Rights");
WHEREAS on June 25, 1996 the Board of Directors of the Company
by resolution approved and authorized amendments to the Agreement and
authorized that the Agreement as so amended be restated; and
WHEREAS the Company and the Rights Agent have agreed on certain
amendments to the Agreement effective as of June 25, 1996, and intend to
give effect to such amendments by entering into this amended and restated
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, 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
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of such Person, shall be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, but shall not include (i)
the Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan or employee stock plan of the Company or of any
Subsidiary of the Company, (iv) any dividend reinvestment plan of the
Company, (v) any Person or entity organized, appointed or established
by the Company for, or pursuant to the terms of, any such plan or
(vi) any Exempt Person. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" 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; provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of the Common Stock
of the Company then outstanding by reason of such an acquisition and
shall, after such acquisition, become the Beneficial Owner of any
additional shares of Common Stock, then such Person shall be deemed
to be an "Acquiring Person."
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
or obligation to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such
tendered securities are
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accepted for purchase or exchange or (B) at any time prior to
the occurrence of a Triggering Event, securities issuable upon
exercise of the Rights or (C) from and after the occurrence of
a Triggering Event, securities issuable upon exercise of Rights
which were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act or any successor provision
thereof), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, or
to "beneficially own," any security under this subparagraph
(ii) as a result of an agreement, arrangement or understanding
to vote such security if such agreement, arrangement or under-
standing: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursu-
ant to, and in accordance with, the applicable provisions of
the General Rules and Regulations under the Exchange Act, and
(B) is not also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report);
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), but excluding
customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities until the expiration of forty days after the date of
such acquisition, for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph
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(c) or disposing of any voting securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the States of New
York or New Jersey are authorized or obligated by law or executive
order to close.
(e) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., New York
City time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock, par value
$1.00 per share, of the Company, except that "Common Stock" when used
with reference to any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or
direct the management, of such Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(h) "Effective Date" shall have the meaning set forth in the
first Whereas clause.
(i) "Exempt Person" shall mean (x) any Person who would
otherwise be an Acquiring Person, whom the Board of Directors of the
Company determines in good faith has become such inadvertently
(including, without limitation, because (A) such Person was unaware
that he or it Beneficially Owned a percentage of Common Stock that
would otherwise cause such person to be an Acquiring Person or (B)
such Person was aware of the extent of his or its Beneficial
Ownership but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement) and if such Person, either
prior to or as promptly as practicable after being advised of such
determination, divests himself or itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person would
no longer be an Acquiring Person, in which case such Person shall not
be deemed to be or to have become an Acquiring Person for any
purposes of this Agreement or (y) any Person designated as such
pursuant to Section 26.
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(j) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(k) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(l) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(m) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company having the rights, powers and preferences set forth in the
form of Articles of Amendment attached hereto as Exhibit A.
(n) "Preferred Stock Fraction" shall mean one one-thousandth
(1/1000) of a share of Preferred Stock.
(o) "Record Date" shall have the meaning set forth in the
first Whereas clause.
(p) "Section 11(a)(ii) Event" shall mean the event described
in Section 11(a)(ii) hereof.
(q) "Section 13 Event" shall mean any event described in
clauses (w), (x), (y) or (z) of Section 13(a) hereof.
(r) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(s) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power, in the absence of
contingencies, to elect at least a majority of the directors or
Persons performing similar functions is beneficially owned, directly
or indirectly, by such Person, or which is otherwise controlled by
such Person.
(t) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
Unless otherwise specified, where reference is made in this
Agreement to sections of, and the General
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Rules and Regulations under, the Exchange Act, such reference shall mean
such sections and rules as amended from time to time and any successor
provisions thereto.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be holders of Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates. (a) Until the Close
of Business on the earlier of (i) the tenth day after the Stock Acquisition
Date (or, if the tenth day after the Stock Acquisition Date occurs before
the Record Date, the Close of Business on the Effective Date) or (ii) the
tenth business day (or such later date as may be determined by the
Company's Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan, employee stock plan or dividend reinvestment plan of the
Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for, or pursuant to the
terms of, any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be the
Beneficial Owner of 15% or more of the shares of Common Stock then out-
standing (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraphs (b) and (c) of this Section 3) by the certificates
for the Common Stock registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company).
As soon as practicable after the Distribution Date, the Rights Agent will
send by first-class, postage prepaid mail, to each such record holder of
the Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
Right Certificates, in substantially the form of Exhibit B hereto
(individually a "Rights
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Certificate" and collectively the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject to adjustment as
provided herein. In the event that an adjustment in the number of Rights
per share of Common Stock has been made pursuant to Section 11(p) hereof,
at the time of distribution of the Rights Certificates, the Company shall
make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred
Stock, in substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), by first-class, postage prepaid mail, to each record holder of
the Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect
to certificates for the Common Stock outstanding on or after the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of such Common
Stock shall also be the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date, the transfer
of any certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Unless the Board of Directors by resolution adopted at or
before the time of the issuance (including pursuant to the exercise of
rights under the Company's benefit plans) of any shares of Common Stock
specifies to the contrary, Rights shall be issued in respect of all shares
of Common Stock which are issued after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock issued after the Record Date, but
prior to the earlier of the Distribution Date or the Expiration Date, shall
also be deemed to be certificates for Rights, and shall bear the following
legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between Union
Camp Corporation (the "Company") and The Bank of New York (the
"Rights
<PAGE>
<PAGE> 8
Agent") dated as of January 25, 1996 (as it may be amended, modified
or supplemented 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 offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Rights will expire on the
Close of Business on February 26, 2006, unless redeemed prior thereto
pursuant to the terms of the Rights Agreement. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as
in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or
by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of
Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates. (a) The Rights
Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall each be substantially in the form set
forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation 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 Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date (or, in the case of
Rights issued with respect
<PAGE>
<PAGE> 9
to Common Stock issued by the Company after the Record Date, as of the date
of issuance of such Common Stock), shall note the date of issuance and on
their face shall entitle the holders thereof to purchase such number of
Preferred Stock Fractions as shall be set forth therein at the price set
forth therein (such exercise price per Preferred Stock Fraction, the
"Purchase Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such, or (iii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing plan, agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan,
agreement, arrangement or understanding which has as a primary purpose or
effect avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate 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
or an Affiliate or Associate of an Acquiring 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 such
Agreement.
The provisions of Section 7(e) of this Agreement shall be operative whether
or not the foregoing legend is contained on any such Rights Certificates.
<PAGE>
<PAGE> 10
Section 5. Countersignature and Registration. (a) The Rights
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its President or any Executive Vice President, Senior Vice
President or Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile thereof which
shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by an authorized signatory of the
Rights Agent but it shall not be necessary for the same signatory to
countersign all of the Rights Certificates issued hereunder. The Rights
Certificates 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 any of the Rights Certificates shall
cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights Agent and
issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be
such officer of the Company; 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 Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. (a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered
<PAGE>
<PAGE> 11
holder to purchase (or receive) a like number of Preferred Stock Fractions
(or, following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer), to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender
the Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate contained
in the form of assignment set forth on the reverse side of each such Rights
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request. Thereupon
the Rights Agent shall, subject to Section 4(b), Section 7(e) and Section
14 hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment from the holder of the Rights of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(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
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restric-
<PAGE>
<PAGE> 12
tions on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form
of election to purchase set forth on the reverse side thereof and the
certificate contained therein duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price (except as
provided in Section 11(q)) with respect to the total number of the
Preferred Stock Fractions (or Common Stock or other securities or property,
as the case may be) as to which such surrendered Rights are exercisable, at
or prior to the earlier of (i) the Close of Business on February 26, 2006
(the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and (ii)
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each Preferred Stock Fraction
pursuant to the exercise of a Right shall initially be $175, and shall be
subject to adjustment from time to time as provided in Section 11 and
Section 13(a) hereof and shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase set forth on the
reverse side thereof and the certificate contained therein duly executed,
accompanied by payment (except as provided in Section 11(q)), with respect
to each Right so exercised, of the Purchase Price per Preferred Stock
Fraction (or Common Stock or other shares, securities or property, as the
case may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent, subject to Section 14(b) and
Section 20(k) hereof, shall thereupon promptly, (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for
the total number of Preferred Stock Fractions to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests subject to applicable law, or (B) if the Company shall have
elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of
Preferred Stock Fractions as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent
<PAGE>
<PAGE> 13
with the depositary agent) and the Company will direct the depositary agent
to comply with such request, (ii) requisition from the Company the amount
of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the regis-
tered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the registered holder of
such Rights Certificate. The payment of the Purchase Price (as such amount
may be reduced (including to zero) pursuant to Section 11(a)(iii) hereof)
may be made (x) in cash or by certified bank check or money order payable
to the order of the Company, or (y) by delivery of a certificate or certi-
ficates (with appropriate stock powers executed in blank attached thereto)
evidencing a number of shares of Common Stock equal to the then Purchase
Price divided by the current market price (as determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such exer-
cise. In the event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or 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, 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, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
(i) any Rights beneficially owned by an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) any Rights transferred by an
Acquiring Person (or any such Associate or Affiliate) after the Acquiring
Person becomes such, or (iii) any Rights transferred by an Acquiring Person
(or any such Associate or Affiliate) prior to or concurrently with the
Acquiring Person becoming such and if the transferee receives such Rights
pursuant to either (A) a transfer (whether or not
<PAGE>
<PAGE> 14
for consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom the Acquiring Person
has any continuing plan, agreement, arrangement or understanding regarding
the transferred Rights or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, agreement, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 7(e), shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise.
The Company shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights Certificates or other Person as a
result of its failure to make any determinations with respect to an
Acquiring Person or its 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 a registered holder 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
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered
to the Company or 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 any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Rights 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
<PAGE>
<PAGE> 15
Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock;
Registration of Securities. (a) The Company covenants and agrees that it
will cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of Common Stock
and/or other securities) the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) that, except as provided in Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on
any national securities exchange, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all
shares (or other securities) reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence
of a Section 11(a)(ii) Event on which the consideration to be delivered by
the Company upon exercise of the Rights has been determined pursuant to
this Agreement (including in accordance with Section 11(a)(iii) hereof), or
as soon as is required by law or regulation following the Distribution
Date, as the case may be, a registration statement or statements under the
Securities Act of 1933 (the "Securities Act"), with respect to the shares
of Common Stock or other securities purchasable upon exercise of the Rights
on an appropriate form or forms, (ii) cause such registration statement or
statements to become effective as soon as practicable after such filing,
and (iii) cause such registration statement or statements 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 the Rights
are no longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue
sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period
<PAGE>
<PAGE> 16
of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), 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 issue
a public announcement stating, and notify the Rights Agent, 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 if the requisite qualification
in such jurisdiction shall not have been obtained or the exercise thereof
would be in violation of applicable law.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Stock
Fractions (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for shares of Preferred Stock
(or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of
a number of Preferred Stock Fractions (or Common Stock and/or other
securities, as the case may be) in respect of a name other than that of,
the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a
number of Preferred Stock Fractions (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
<PAGE>
<PAGE> 17
Section 10. Preferred Stock Record Date. Each person in whose
name any certificate for a number of Preferred Stock Fractions (or Common
Stock 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 Preferred Stock Fractions (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and all applicable transfer taxes) was made; provided, however, that
if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock 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 (fractional or otherwise)
on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock (or Common Stock and/or other securities, as
the case may be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares (fractional or otherwise) for which the
Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock or other capital stock, (B) subdivide
the outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in Section 11(a)(ii) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the
<PAGE>
<PAGE> 18
number and kind of shares of Preferred Stock or capital stock, as the case
may be, issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock or capital stock, as the case
may be, which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock (or other capital stock, as the
case may be) transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided 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) hereof.
(ii) In the event that a Stock Acquisition Date shall occur,
unless the event causing the Stock Acquisition Date to occur is a
transaction set forth in section 13(a) hereof, proper provision shall be
made so that each holder of a Right (except as provided in
Section 11(a)(iii), and in Section 7(e) hereof) 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 shares of
Preferred Stock, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of Preferred Stock Fractions for which a
Right was exercisable by such holder immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(such product, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the current market price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such first
occurrence (such number of shares of Common Stock is herein called the
"Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's articles of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph
<PAGE>
<PAGE> 19
(ii) of this Section 11(a), and subject to such limitations as are
necessary to prevent a default under any agreement for money borrowed as
presently constituted to which the Company is a party and subject to any
limitations contained in Section 13.1-653 of the Virginia Stock Corporation
Act, 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, preferred shares
or Preferred Stock Fractions) which the Board of Directors of the Company
has deemed to have the same value as shares of Common Stock (such shares,
"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 an
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 Section 11(a)(ii) Event (the "Section
11(a)(ii) Trigger Date"), 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 securities and/or assets in the aggregate
are equal to the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise in full of
the Rights, the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days following the
first occurrence of a Section 11(a)(ii) Trigger Date, in order that the
Company may seek shareholder 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
<PAGE>
<PAGE> 20
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 (as determined
pursuant to Section 11(d) hereof) per share of the Common Stock on the date
of the first occurrence of a Section 11(a)(ii) Trigger Date and the value
of any "common stock equivalent" shall be deemed to have the same value as
the Common Stock on such date.
(iv) If the rules of the national securities exchange,
registered as such pursuant to Section 6 of the Exchange Act, or of the
national securities association, registered as such pursuant to Section 15A
of the Exchange Act, on which the shares of Common Stock are principally
traded would prohibit such exchange or association from listing or
continuing to list, or from authorizing for or continuing quotation and/or
transaction reporting through an inter-dealer quotation system, the shares
of Common Stock or other equity securities of the Company if the Rights
were to be exercised for shares of Common Stock in accordance with subpara-
graph (ii) of this Section 11(a) because such issuance would nullify,
restrict or disparately reduce the per share voting rights of holders of
shares of Common Stock or for any other reason, the Company shall: (A)
determine 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) equity securities of the Company,
including, without limitation, "common stock equivalents," other than
securities which would have the effect of nullifying, restricting or
disparately reducing the per share voting rights of holders of shares of
Common Stock or otherwise cause the prohibition described above, (3) debt
securities of the Company, (4) other assets, or (5) 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 an 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 Section 11(a)(ii) Trigger Date,
then the Company shall be obligated to deliver, upon the surrender for
exercise of a
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<PAGE> 21
Right and without requiring payment of the Purchase Price, cash having an
aggregate value equal to the Spread. To the extent that the Company
determines that an action needs to be taken pursuant to the first sentence
of this Section 11(a)(iv), the Company (x) shall provide, subject to
Section 7(e), that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights, but not longer
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order 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)(iv), the value of the Common
Stock shall be the current market price (as determined pursuant to Section
11(d) hereof) per share of Common Stock on the Section 11(a)(ii) Trigger
Date and the value of any "common stock equivalent" shall be deemed to have
the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all
holders of Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such record
date) Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent preferred
stock")), or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, the Purchase
Price to be in effect after such record date shall be determined by multi-
plying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate offering price of the total number
of shares of Preferred Stock and/or equivalent preferred stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price,
and the denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of
<PAGE>
<PAGE> 22
additional shares of Preferred Stock and/or equivalent preferred stock to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such sub-
scription price may be paid by delivery of consideration part or all of
which may 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 and the holders
of the Rights. Shares of Preferred Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend paid out of the earnings or
retained earnings of the Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred 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) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock
and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock.
Such adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.
<PAGE>
<PAGE> 23
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the "current
market price" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for
the thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the "current market price" per
share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however, that in the event that the then current market price per share of
the Common Stock is determined during a period following the announcement
by the issuer of such Common Stock of (A) a dividend or distribution on
such Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights), or
(B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, 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 properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common Stock
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 by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board of
<PAGE>
<PAGE> 24
Directors of the Company. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be
used and shall be conclusive for all purposes. The term "Trading Day"
shall mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in
the same manner as set forth above for the Common Stock in Section 11(d)(i)
hereof (other than the last sentence thereof). If the current market price
per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in
a manner described in Section 11(d)(i), the "current market price" per
share of Preferred Stock shall be conclusively deemed to be an amount equal
to 1000 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalization with respect to the
Common Stock occurring after the date of this Agreement) multiplied by the
current market price per share of Common Stock. If neither the Common
Stock nor the Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of a Preferred Stock
Fraction shall be equal to the "current market price" of one share of
Preferred Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) to the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made
<PAGE>
<PAGE> 25
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest one cent or to the nearest one ten-thousandth of a share of Common
Stock or other share or one one-millionth of a share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k),
(m) and (q) hereof, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Preferred
Stock Fractions (or other consideration, as the case may be) purchasable
from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the 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 there-
after evidence the right to purchase, at the adjusted Purchase Price, that
number of Preferred Stock Fractions (calculated to the nearest one-
millionth) obtained by (i) multiplying (x) the number of Preferred Stock
Fractions covered by a Right immediately prior to this adjustment, by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
<PAGE>
<PAGE> 26
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of Preferred Stock Fractions purchasable upon
the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of
Preferred Stock Fractions for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. 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 ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear,
at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Stock Fractions issuable upon the exercise
of the Rights, the Rights Certificates theretofore and thereafter issued
may continue to express the Purchase Price per Preferred Stock Fraction and
the number of Preferred Stock Fractions which were expressed in the initial
Rights Certificates issued hereunder.
<PAGE>
<PAGE> 27
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the then stated
value, if any, of the number of Preferred Stock Fractions issuable upon
exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable Preferred Stock
Fractions at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer, until the occurrence of
such event, the issuance to the holder of any Right exercised after such
record date the number of Preferred Stock Fractions and other capital stock
or securities of the Company, if any, issuable upon such exercise over and
above the number of Preferred Stock Fractions and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) of Common Stock and other
capital stock or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Board of Directors of the Company shall be entitled to
make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent
that in their good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the current market price, (iii)
issuance wholly for cash of any shares of Preferred Stock or securities
which by their terms are convertible into or exchangeable for any shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section
<PAGE>
<PAGE> 28
11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (iii) effect a statutory share exchange with any Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or (iv) sell or transfer (or permit any
Subsidiary to sell or transfer), 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 or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, merger, statutory share exchange or sale there are any
rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation, merger,
statutory share exchange or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Close of Business on the Effective Date and prior to the Distribution Date
(i) declare a dividend 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 associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock 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
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<PAGE> 29
total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event.
(q) In the event that the Rights become exercisable following
a Section 11(a)(ii) Event, the Company by action of a majority of the Board
of Directors, at its option, may provide that each Right, subject to
Section 7(e), shall be exchanged for one share of Common Stock (or cash or
other securities or assets to be substituted for the Adjustment Shares
pursuant to, and otherwise within the time period, provided by, subsection
11(a)(iii)) appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof, in
consideration of the surrender to the Company of the Rights so exercised
and without other payment of the Purchase Price. Upon the Company's
election to provide for such exchange, all Rights shall be terminated and
the only right thereafter of a holder of such Rights shall be to receive
the above described securities. Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any wholly owned Subsidiary of
the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding shares of Common Stock for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the shares of
Common Stock then outstanding.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or
Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate and (c) mail a brief summary thereof to each holder of a 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 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event that, following the Stock
Acquisition Date, directly or
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<PAGE> 30
indirectly, (w) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (x)
any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with
or into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for stock or other securities of
any other Person or cash or any other property, (y) the Company shall be a
party to a statutory share exchange with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) after which the Company is a Subsidiary of any other Person,
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, 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 Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case, proper
provision shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of Preferred
Stock Fractions for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the Section 13 Event, multiplying the Purchase Price
in effect immediately prior to the first occurrence of such Section
11(a)(ii) Event by the number of Preferred Stock Fractions for which such
Right was exercisable immediately prior to such first occurrence) and
dividing that product (such product, following the first occurrence of a
Section 13 Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of the current
market price (determined pursuant to
<PAGE>
<PAGE> 31
Section 11(d)(i) hereof) per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in con-
nection with the consummation of any such transaction as may be necessary
to ensure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (w),
(x) or (y) 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 in such merger, consolidation or statutory
share exchange, and if no securities are so issued, the Person that
is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal Party"
shall refer to such other Person; and (2) in case such Person is a Subsid-
iary, directly or indirectly, of more than one Person, the Common Stock of
two or more of which are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the
<PAGE>
<PAGE> 32
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, statutory share exchange, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of Common Stock
which have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger, statutory share exchange or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party at its own expense will
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
Blue Sky laws of such jurisdictions as may be necessary or
appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration
on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or statutory share exchanges or sales or other
transfers. In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights which have
not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights, except prior to
the Distribution Date
<PAGE>
<PAGE> 33
as provided in Section 11(p) hereof, or to distribute Rights Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a
whole Right. For purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price of the Rights for any day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Rights are not listed or admitted
to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the Rights are
listed or admitted to trading, or if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by
the Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the Company
shall be used and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than Preferred Stock Fractions) upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than Preferred Stock
Fractions). In lieu of fractional shares of Preferred Stock that are not
Preferred Stock Fractions, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of the Preferred Stock Fractions. For purposes of this Section
14(b), the current market value of Preferred Stock Fractions shall be one
one-thousandth of the closing price
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<PAGE> 34
of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one (1) share of
Common Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock shall be the closing price of one share of
Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
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 the Common Stock in respect of which Rights have been issued);
and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of such Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of such Common Stock), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees
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<PAGE> 35
with the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) any restriction on transfer deemed to be imposed by this
Agreement is valid and enforceable against the holder and any
transferee of the holder in accordance with Section 13.1-649 of the
Virginia Stock Corporation Act; and
(d) 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 a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or
the associated Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice
to the contrary.
(e) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or en-
acted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the
Company must use its best efforts to have any such order, decree or
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<PAGE> 36
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder
of the number of Preferred Stock Fractions or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certifi-
cate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 24 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) 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 outside counsel fees and disbursements
and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any 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.
(b) 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 for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, instruction,
consent, certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where
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<PAGE> 37
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) 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 paper or any
further act on the part of any of the parties hereto; provided, however,
that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor 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.
(b) 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),
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<PAGE> 38
and the written 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 and 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 herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Executive Vice President,
Senior Vice President or Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same
(except as to its countersignature on such Rights Certificates), but
all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall
it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining
of the
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<PAGE> 39
existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment); nor shall
it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of
Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any
Executive Vice President, Senior Vice President or Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer. At
any time the Rights Agent may apply to the Company for written
instructions with respect to any matter arising in connection with
the Rights Agent's duties and obligations arising under this
Agreement. Such application by the Rights Agent for written instruc-
tions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the
Rights Agent with respect to its duties or obligations under this
Agreement and the date on and/or after which such action shall be
taken and the Rights Agent shall not be liable for any action taken
or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall
be not less than five Business Days after the Company receives such
application, without the Company's consent) unless, prior to taking
or initiating any such action, the Rights Agent has received written
instructions in response to such
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<PAGE> 40
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other 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, de-
fault, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, default, neglect
or misconduct; provided, however, reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indem-
nification against such risk or liability is not reasonably assured
to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained
in the form of assignment or form of election to purchase set forth
on the reverse thereof, 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 of 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 thirty (30) days' notice in writing mailed to the
Company, and to
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<PAGE> 41
each transfer agent of the Common Stock and Preferred Stock, by registered
or certified mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the 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 thirty (30) days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any 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) a corporation
organized and doing business under the laws of the United States or of the
State of New York or of the Commonwealth of Virginia (or of any other state
of the United States so long as such corporation is authorized to do
business as a banking institution in the State of New York or the
Commonwealth of Virginia), in good standing, 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
$100,000,000 or (b) an Affiliate of any such corporation described in
clause (a) above. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it
had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock and the Preferred Stock,
and mail a notice thereof in writing to the registered holders of the
Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
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<PAGE> 42
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors
to reflect any adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Common
Stock following the Distribution Date and prior to the Expiration Date, the
Company (a) shall, with respect to Common Stock so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed necessary
or appropriate by the Board 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 date on which a Section 11(a)(ii) Event occurs or (ii)
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right, as such amount
shall be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"); and the
Company may, at its option, pay the Redemption Price either in cash or
securities or both having a current market price, as of a date determined
by the Board of Directors, of $.001.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which shall
have been filed with the
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<PAGE> 43
Rights Agent and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board of Directors order-
ing the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last
address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer Agent for
the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
Section 24. Notice of Certain Events. (a) In case the
Company shall propose, at any time after the Distribution Date, (i) to pay
any dividend payable in stock of any class to the holders of Preferred
Stock or to make any other distribution to the holders of Preferred Stock
(other than a regular quarterly cash dividend paid out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or to effect a statutory share exchange with
any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other trans-
fer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of
such stock
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<PAGE> 44
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, statutory share exchange, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of the
shares of Preferred Stock for purposes of such action, and in the case of
any such other action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the shares of Preferred Stock whichever shall be the earlier.
(b) Upon the occurrence of a Section 11(a)(ii) Event, (i) the
Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section
25 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to Common
Stock and/or, if appropriate, other securities.
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:
Union Camp Corporation
1600 Valley Road
Wayne, New Jersey 07470
Attention: Corporate 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:
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<PAGE> 45
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Department
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. Prior to the
Distribution Date and subject to the penultimate sentence of this Section
26, the Company may, by resolution of its Board of Directors, and the
Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section
26, the Company and the Rights Agent shall, if the Company so directs, sup-
plement or amend this Agreement without the approval of any holders of
Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder, (iv) to designate as an Exempt Person any Person
who (A) is permitted to report Beneficial Ownership of securities
(including Common Stock) on Schedule 13G promulgated under the General
Rules and Regulations under the Exchange Act or any successor provision
thereof and (B) to the extent required by the Board of Directors of the
Company (i) agrees to reduce its Beneficial Ownership below 15% in a manner
satisfactory to the Board of Directors of the Company and does so reduce
its Beneficial Ownership or (ii) agrees to such conditions to retaining
Beneficial Ownership as the Board of Directors of the Company (in its sole
discretion) deems necessary or advisable (which designation shall be deemed
not to adversely affect the interests of the holders of Rights
Certificates) or (v) to change or supplement the provisions hereunder in
any other 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 or an Affiliate or Associate
of an Acquiring Person); provided, this Agreement may not be supplemented
or amended to lengthen, pursuant to clause
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<PAGE> 46
(iii) of this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable, or (B) any
other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits, to the holders
of Rights. Upon the delivery of a certificate from an appropriate officer
of the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price, the Final Expiration Date, the Purchase
Price or the number of Preferred Stock Fractions for which a Right is
exercisable. Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders of
Common Stock.
Section 27. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as
in effect on the date hereof. The Board of Directors of the Company shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of
Directors, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make
all determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made
by the Board of Directors in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent,
<PAGE>
<PAGE> 47
the holders of the Rights Certificates and all other parties, and (y) not
subject the Board of Directors to any liability to the holders of the
Rights.
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 the Rights Certificates
(and, prior to the Distribution Date, registered holders of the Common
Stock) any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certifi-
cates (and, prior to the Distribution Date, registered holders of the
Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; 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.
Section 31. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the Commonwealth of Virginia and for all purposes
shall be governed by and construed in accordance with the laws of such
Commonwealth applicable to contracts made and to be performed entirely
within such Commonwealth.
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.
<PAGE>
<PAGE> 48
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
* * *
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.
Attest: UNION CAMP CORPORATION
By /s/ Dirk R. Soutendijk By /s/ W. Craig McClelland
Name: Dirk R. Soutendijk Name: W. Craig McClelland
Title: Vice President, Title: Chairman of the Board
General Counsel and Chief Executive
and Secretary Officer
Attest: THE BANK OF NEW YORK
By /s/ Kathleen A. Flaherty By /s/ Raymond Romanski
Name: Kathleen A. Flaherty Name: Raymond Romanski
Title: Assistant Treasurer Title: Vice President
<PAGE>
<PAGE> A-1
EXHIBIT A
ARTICLES OF AMENDMENT
OF THE ARTICLES OF INCORPORATION
of
UNION CAMP CORPORATION
I, W. Craig McClelland, Chairman of the Board and Chief
Executive Officer of Union Camp Corporation (the "Corporation"), a corpora-
tion organized and existing under the Virginia Stock Corporation Act, in
accordance with the provisions of Sections 13.1-604, 13.1-706 and 13.1-639
thereof, do hereby certify:
1. That the name of the corporation is Union Camp Corporation.
2. That on November 28, 1995, pursuant to Section 13.1-639 of
the Virginia Stock Corporation Act and to the authority conferred upon the
Board of Directors by the Articles of Incorporation of the said Corpo-
ration, the Board of Directors of the Corporation duly adopted the
following resolutions (a) deleting the references in the Articles of
Incorporation to the Corporation's existing Series A Junior Participating
Preferred Stock and (b) creating a new series of 125,000 shares of
Preferred Stock designated as a Series A Junior Participating Preferred
Stock:
RESOLVED, that it is hereby declared to be in the best
interests of the Corporation that the Articles of Incorporation of
the Corporation, as amended and restated to date, be further amended
by deleting the existing Part C to Article III of the Articles of
Incorporation of the Corporation, in its entirety; and, it is further
RESOLVED, that it is hereby declared to be in the best
interests of the Corporation that the Articles of Incorporation of
the Corporation, as amended and restated to date, be further amended
to create a new series of Preferred Stock to consist of one hundred
twenty-five thousand (125,000) shares and to be designated as Series
A Junior Participating Preferred Stock, and to determine the
preferences, limitations and relative rights of the Series A Junior
Participating Preferred Stock by adding a new Part C to Article III
of such Articles of Incorporation to read as follows:
<PAGE>
<PAGE> A-2
PART C
Series A Junior Participating Preferred Stock.
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting such
series shall be 125,000.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors out of
funds legally available therefor, quarterly dividends payable in cash on
the thirteenth day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $200.00 or (b) subject to the provision for adjustment
hereinafter set forth, 1000 times the aggregate per share amount of all
cash dividends, and 1000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $1.00 per share, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any time
after February 15, 1996 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common
Stock (other than a
<PAGE>
<PAGE> A-3
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $200.00 per share
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Direc-
tors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30
days prior to the date fixed for the payment thereof.
(D) Dividends in full shall not be declared or paid or set
apart for payment on the Series A Preferred Stock for a dividend period
terminating on the Quarterly Dividend Payment Date unless dividends in full
have been declared or paid or set apart for payment on the Preferred Stock
of all series (other than series with respect to which dividends are not
cumulative from a date prior to such dividend date) for the respective
dividend periods terminating on such dividend date. When the dividends are
not paid in full on all series of the Preferred Stock, the shares of all
series shall share ratably in the payment of dividends, including accumula-
tions, if any, in accordance with the sums which would be payable on said
shares if all dividends were declared and paid in full.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
<PAGE>
<PAGE> A-4
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 1000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) sub-
divide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, the Articles of
Incorporation or by-laws, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock shall vote together
as one voting group on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends an any Series A Preferred
Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall
extend until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly
dividend period on all shares of Series A Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, at any annual meeting of stock-
holders or special meeting held in lieu thereof or at a special
meeting of the holders of the Preferred Stock, all holders of
Preferred Stock (including holders of the Series A Junior Par-
ticipating Preferred Stock) with dividends in arrears in an amount
equal to six (6) quarterly dividends thereon), voting together as one
voting group, irrespective of series, shall have the right to elect
two (2) Directors. At any time while the holders of the Preferred
Stock voting together as one voting group are entitled to elect two
directors as herein provided, they shall not be entitled to partici-
pate with the holders of Common Stock in the election of any other
directors.
<PAGE>
<PAGE> A-5
(ii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect Directors, the Secretary of the Corporation may, and upon the
written request of stockholders of record of ten percent (10%) or
more of the total number of shares of Preferred Stock outstanding
irrespective of series addressed to him at the principal office of
the Corporation in the United States, shall, call a special meeting
of the holders of Preferred Stock, for the election of the directors
to be elected by them to be held within 30 days after such call and
at a place and upon the notice provided by law and in the by-laws for
the holding of meetings of stockholders; provided, however, that the
Secretary shall not be required to call such special meeting in the
case of any such request received less than 90 days before the date
fixed for any annual meeting of stockholders or special meeting held
in lieu thereof. If any such special meeting required to be called
as provided shall not be called by the Secretary within 30 days after
the receipt of any such request, then the holders of record of 10% or
more of the Preferred Stock outstanding may designate in writing one
of their number to call such meeting, and the person so designated
may call such meeting to be held at the place and upon the notice
above provided and for that purpose shall have access to the stock
ledger of the Corporation. No such special meeting and no adjourn-
ment thereof shall be held on a date later than 30 days before the
annual meeting of the stockholders or special meeting held in lieu
thereof next succeeding the time when the holders of the Preferred
Stock become entitled to elect directors as above provided.
(iii) If any such special meeting shall be called as above
provided, or if the holders of Preferred Stock shall become entitled
to elect directors as above provided at any annual meeting of
stockholders or special meeting held in lieu thereof, then, by vote
of the holders of at least a majority of the shares of the Preferred
Stock which are present or represented by proxy at such meeting, the
then authorized number of directors of the Corporation shall be
increased by two, and at such meeting, and at all subsequent annual
meetings of stockholders or special meetings held in lieu thereof
until the holders of the Preferred Stock shall be divested of such
voting power, the holders of the Preferred Stock shall be entitled to
elect the additional directors so provided for, but any directors so
elected shall not hold office beyond the next annual meeting of
stockholders or special meeting held in lieu thereof next succeeding
the meeting at which such directors are elected.
<PAGE>
<PAGE> A-6
(iv) In any default period the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right to
elect two (2) Directors voting together as one voting group, after
the exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of
Directors may be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the voting group of
stock which elected the Director whose office shall have become
vacant. In the event that there are no such Directors to vote to
fill such vacancy, such vacancy shall be filled by such group of
stockholders. References in this paragraph (C) to Directors elected
by the holders of a particular voting group of stock shall include
Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock voting together as one
voting group to elect Directors shall cease, subject always to the
same provisions for the vesting of such voting rights in the case of
any similar future arrearages in dividends, (y) the term of any
Directors elected by the holders of Preferred Stock voting together
as one voting group shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the Articles of
Incorporation or by-laws irrespective of any increase made pursuant
to the provisions of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in the
Articles of Incorporation or by-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining
Directors.
(D) Except as set forth herein or as otherwise provided in the
Articles of Incorporation, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
<PAGE>
<PAGE> A-7
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the Corporation
shall not
(i) declare or pay or set apart for payment any dividends
(other than dividends payable in shares of any class or classes of
stock of the Corporation ranking junior to the Series A Preferred
Stock) or make any other distributions on, any class of stock of the
Corporation ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock and will not redeem, purchase or otherwise acquire, directly or
indirectly, whether voluntarily, for a sinking fund, or otherwise any
shares of any class of stock of the Corporation ranking junior
(either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock, provided that, notwithstanding
the foregoing, the Corporation may at any time redeem, purchase or
otherwise acquire shares of stock of any such junior class in
exchange for, or out of the net cash proceeds from, the concurrent
sale of other shares of stock of any such junior class;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding
up) to the Series A Preferred Stock;
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on
a parity with the Series A
<PAGE>
<PAGE> A-8
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of Direc-
tors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and re-
strictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have
received $450 per share, plus an amount equal to accrued and unpaid divi-
dends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the
payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Preferred Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 1000 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock
dividends and recapitalization with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following the payment of
the full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A Preferred Stock
and Common Stock, respectively, holders of Series A Preferred Stock
<PAGE>
<PAGE> A-9
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio
of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common
Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series A Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 1000 times
the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share
of Common Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after
<PAGE>
<PAGE> A-10
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 8. Redemption. The outstanding shares of Series A
Preferred Stock may be redeemed at the option of the Board of Directors as
a whole, but not in part, at any time, or from time to time, at a cash
price per share equal to (i) the product of the Adjustment Number times the
Average Market Value (as such term is hereinafter defined) of the Common
Stock, plus (ii) all dividends which on the redemption date have accrued on
the shares to be redeemed and have not been paid or declared and a sum
sufficient for the payment thereof set apart, without interest; provided,
however, that if and whenever any quarterly dividend shall have accrued on
the Series A Preferred Stock which has not been paid or declared and a sum
sufficient for the payment thereof set apart, the Corporation may not
purchase or otherwise acquire any shares of Series A Preferred Stock unless
all shares of such stock at the time outstanding are so purchased or
otherwise acquired. The "Average Market Value" is the average of the
closing sale prices of the Common Stock during the 30 day period
immediately preceding the date before the redemption date on the Composite
Tape for New York Stock Exchange Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or, if such
stock is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934,
as amended, on which such stock is listed, or, if such stock is not listed
on any such exchange, the average of the closing bid quotations with
respect to a share of Common Stock during such 30-day period on the
National Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use, or if no such quotations are available,
the fair market value of the Common Stock as determined by the Board of
Directors in good faith.
Section 9. Ranking. The Series A Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of
any such series shall provide otherwise.
Section 10. Amendment. The Corporation shall not create any
other class or classes of stock ranking prior to the Series A Preferred
Stock either as to dividends or liquidation, or increase the authorized
number of shares of any such other class of stock, or amend, alter, or
repeal any of the provisions of the Articles of Incorporation or the
resolution or resolutions adopted by the Board of Directors authorizing the
Series A Preferred Stock so as to adversely affect the preferences, rights
or powers of the Series A Preferred Stock without the affirmative
<PAGE>
<PAGE> A-11
vote of the holders of more than two-thirds of the outstanding shares of
the Series A Preferred Stock, voting separately as one voting group.
Section 11. Fractional Shares. Series A Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series A Preferred Stock.
3. That this amendment to the Articles of Incorporation of the
Corporation as amended and supplemented was adopted on November 28, 1995
and, as permitted by Section 13.1-606 of the Virginia Stock Corporation
Act, shall become effective at 5:00 p.m., New York City time, on February
26, 1996.
4. That this amendment to the Articles of Incorporation of the
Corporation as amended and supplemented was duly adopted by the Board of
Directors of the Corporation.
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of
perjury this 19th day of February, 1996.
UNION CAMP CORPORATION
By: /s/ W. Craig McClelland
Chairman of the Board
Attest:
/s/ Dirk R. Soutendijk
Secretary
<PAGE>
<PAGE> B-1
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER THE FINAL EXPIRATION DATE OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING 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 SUCH AGREEMENT.]
Rights Certificate
UNION CAMP 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 January 25, 1996 and as
amended and restated as of June 25, 1996 (as it may be further amended,
modified or supplemented from time to time, the "Rights Agreement"),
between Union Camp Corporation, a Virginia corporation (the "Company"), and
The Bank of New York, a New York banking corporation (the "Rights Agent"),
to purchase from the Company at any time prior to 5:00 P.M. (New York City
time) on the Expiration Date (as defined in the Rights Agreement), which
shall not be later than February 26, 2006 at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights
Agent, one one-thousandth of a fully paid, non-assessable share of Series A
Junior Participating Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price (the "Purchase Price") of Preferred Stock
(such fraction, a "Preferred Stock Fraction"), of $175 per one one-
thousandth of a share upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase set forth on the reverse
side hereof and related Certificate duly executed. Except as otherwise
provided in Section 11(q) of the Rights Agreement, the
<PAGE>
<PAGE> B-2
Purchase Price shall be paid, at the election of the holder, in cash or
certified bank check or money order payable to the order of the Company, or
in shares of Common Stock of the Company having an equivalent value. The
number of Rights evidenced by this Rights Certificate (and the number of
Preferred Stock Fractions which may be purchased upon exercise thereof) set
forth above, and the Purchase Price per Preferred Stock Fraction set forth
above, are the number of Rights, Preferred Stock Fractions and Purchase
Price as of __________, 19__,1/ based on the Preferred Stock as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Af-
filiate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities, 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, including Triggering Events (as such term is defined in
the Rights Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and
are also available upon written request to the Rights Agent.
_____________________________
1/ Insert the Distribution Date.
<PAGE>
<PAGE> B-3
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the
Rights Agent designated for such purpose, 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
Preferred Stock Fractions (as defined in the Rights Agreement) as the
Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $.001 per Right at any time prior to the earlier
of the Close of Business on (i) the date on which a Section 11(a)(ii) Event
occurs and (ii) the Final Expiration Date.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of Preferred Stock Fractions, which may, at
the election of the Company, be evidenced by depositary receipts), but in
lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
<PAGE>
<PAGE> B-4
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of __________ __, 19__
ATTEST: Union Camp Corporation
_______________________ By ____________________________
Secretary Title:
Countersigned:
_______________________
By_____________________
Authorized Signature
<PAGE>
<PAGE> B-5
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _______________________________________________
hereby sells, assigns and transfers unto _________________________
__________________________________________________________________
(Please print name and address of transferee)
__________________________________________________________________
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 power of
substitution.
Dated: _______________, 19___
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
<PAGE>
<PAGE> B-6
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, 19__ _______________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
<PAGE>
<PAGE> B-7
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: UNION CAMP CORPORATION:
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Rights Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that certificates
for such shares be issued in the name of and delivered 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 balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
__________________________________________________________________
(Please print name and address)
__________________________________________________________________
__________________________________________________________________
Dated: _______________, 19___
___________________________
Signature
Signature Guaranteed:
<PAGE>
<PAGE> B-8
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, 19__ _______________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing 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.
<PAGE>
<PAGE> C-1
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On November 28, 1995, the Board of Directors of Union Camp
Corporation, a corporation organized under the laws of Virginia (the
"Company"), declared a dividend distribution as of the Close of Business on
February 26, 1996, of one Right for each outstanding share of common stock,
par value $1.00 per share (the "Common Stock"), of the Company to
stockholders of record at the Close of Business on February 15, 1996 (the
"Record Date"). Each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred Stock") at a
price (the "Purchase Price") of $175 per one-thousandth of a share of
Preferred Stock (such fraction, the "Preferred Stock Fraction"), subject to
adjustment. The Purchase Price shall be paid, at the option of the holder,
in cash or by certified bank check or money order payable to the order of
the Company, or shares of Common Stock having a value at the time of
exercise equal to the Purchase Price. The description and terms of the
Rights are set forth in the Rights Agreement between the Company and The
Bank of New York, as Rights Agent, dated as of January 25, 1996, as amended
and restated as of June 25, 1996 (the "Rights Agreement").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
certificates evidencing the Rights (the "Rights Certificates") will be
distributed. The Rights will separate from the Common Stock and a
distribution of the Rights Certificates will occur (the "Distribution
Date") upon the earlier of (i) ten days after the public announcement by
the Company or an acquiring person that a person or group of affiliated or
associated persons other than an Exempt Person (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the "Stock Acquisition
Date"), or (ii) 10 business days (or such later date as may be determined
by the Company's Board of Directors prior to such time as any person
becomes an Acquiring Person) following the commencement of a tender offer
or exchange offer that would result in a person or group beneficially
owning 15% or more of such outstanding shares of Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record
Date will
<PAGE>
<PAGE> C-2
contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
Exempt Person means (x) any Person who would otherwise be an
Acquiring Person, whom the Board of Directors of the Company determines in
good faith has become such inadvertently (including, without limitation,
because (A) such person was unaware that he or it beneficially owned a
percentage of Common Stock that would otherwise cause such person to be an
Acquiring Person or (B) such Person was aware of the extent of his or its
beneficial ownership but had no actual knowledge of the consequences of
such beneficial ownership under the Rights Agreement) and if such person,
either prior to or as promptly as practicable after being advised of such
determination, divests himself or itself of beneficial ownership of a
sufficient number of shares of Common Stock so that such Person would no
longer be an Acquiring Person, in which case such Person shall not be
deemed to be or to have become an Acquiring Person for any purposes of the
Rights Agreement or (y) any Person designated as an Exempt Person by the
Board of Directors pursuant to an amendment to the Rights Agreement
described below.
The Rights are not exercisable until the Distribution Date and
will expire at the Close of Business on February 26, 2006, unless earlier
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the Close of Business on the Distribution Date, and thereafter such
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a Stock Acquisition Date shall occur, the
Rights Agreement provides that proper provision shall be made so that each
holder of a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise
price of the Right. Alternatively, if the Rights become exercisable as set
forth in this paragraph, the Company by action of the majority of its Board
of Directors may provide that each Right shall be exchanged for one share
of Common Stock upon the surrender to the Company of the Rights so
exercised and without other payment of the Purchase Price; provided that
the Board of
<PAGE>
<PAGE> C-3
Directors shall not be able to effect such exchange at any time after any
Person (other than the Company or certain other related parties), together
with all Affiliates and Associates of such Person, beneficially own 50% or
more of the shares of Common Stock then outstanding. The only right of a
holder of Rights following the Company's election to provide for such
exchange shall be to receive the above-described securities.
Notwithstanding any of the foregoing, following the occurrence of any of
the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
For example, at an exercise price of $175 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder to
purchase $350 worth of Common Stock (or other consideration, as noted
above) for $175. Assuming that the Common Stock had a per share value of
$70 at such time, the holder of each valid Right would be entitled to
purchase five shares of Common Stock for $175. Alternatively, the Company
could permit the holder to surrender each Right in exchange for one share
of Common Stock (with a value of $70) without the payment of any
consideration other the surrender of the Right.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company engages in a merger or consolidation with another person in which
the Company is the surviving corporation, but in which all or part of its
Common Stock is changed or exchanged, (iii) the Company is a partner to a
statutory share exchange with any person after which the Company is a
subsidiary of any other person or (iv) 50% or more of the Company's assets
or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to twice the exercise price of the
Right.
The Purchase Price payable, and the number of Preferred Stock
Fractions or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock or other capital stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or other capital stock or convertible
<PAGE>
<PAGE> C-4
securities at less than the current market price of the Preferred Stock or
other capital stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share)
will be issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
At any time prior to the earlier of (i) the Stock Acquisition
Date and (ii) the Expiration Date, the Board of Directors of the Company
may redeem the Rights, in whole but not in part, at a price of $0.001 per
Right, payable in cash or securities or both (the "Redemption Price").
Immediately upon the action of the Board of Directors of the Company
ordering redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board of Directors in order to cure any ambiguity, to
designate as an Exempt Person any person who (A) is permitted to report
beneficial ownership of securities (including Common Stock) on Schedule 13G
promulgated under the Securities Exchange Act of 1934, as amended and
(B) to the extent required by the Board of Directors of the Company
(i) agrees to reduce its beneficial ownership below 15% in a manner
satisfactory to the Board of Directors of the Company and does so reduce
its beneficial ownership or (ii) agrees to such conditions to retaining
beneficial ownership as the Board of Directors
<PAGE>
<PAGE> C-5
of the Company (in its sole discretion) deems necessary or advisable (which
designation shall be deemed not to adversely affect the interests of the
holders of Rights Certificates), and to make such other changes which do
not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time
period under the Rights Agreement; provided, however, no amendment to
adjust the time period governing redemption may be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an amendment on From 8-A/A to a
Registration Statement on Form 8-A respecting the Rights. A copy of the
Rights Agreement is available free of charge from the Rights Agent. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference in its entirety.
