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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AETNA INC.
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(Exact name of registrant as specified in its charter)
Connecticut 02-0488491
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(State of incorporation or organization) (IRS Employer Identification No.)
151 Farmington Ave.
Hartford, Connecticut 06156
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(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
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Class B Voting Preferred Stock, Series A, New York Stock Exchange
Purchase Rights
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
On September 24, 1999, the Board of Directors of Aetna Inc., a Connecticut
corporation (the "Company"), declared a dividend of one preferred stock purchase
right (a "Right") for each outstanding share of common stock, par value $.01 per
share (the "Common Stock"), of the Company. The dividend will be paid on
November 8, 1999 (the "Record Date") to holders of record as of the close of
business on November 8, 1999.
Prior to the Distribution Date (as defined below), the Rights will be
evidenced by the certificates for the Common Stock or by a current ownership
statement issued with respect to uncertificated Common Stock and will be
transferred with the Common Stock, and the registered holders of the Common
Stock will be deemed to be the registered holders of the Rights. After the
Distribution Date, the Rights Agent will mail separate certificates evidencing
the Rights to each record holder of the Common Stock as of the close of business
on the Distribution Date, and thereafter the Rights will be transferable
separately from the Common Stock. The "Distribution Date" generally means the
earlier of (i) the close of business on the 10th day after the date (the "Stock
Acquisition Date") of the first public announcement that a person (other than
the Company or any of its subsidiaries or any employee benefit plan of the
Company or any such subsidiary) has acquired beneficial ownership of 15% or more
of the outstanding shares of Common Stock (an "Acquiring Person") and (ii) the
close of business on the 10th business day (or such later day as may be
designated by the Board of Directors before any person has become an Acquiring
Person) after the date of the commencement of a tender or exchange offer by any
person which would, if consummated, result in such person becoming an Acquiring
Person.
Prior to the Distribution Date, the Rights will not be exercisable to
purchase Class B Voting Preferred Stock, Series A, $.01 par value per share (the
"Preferred Stock"). After the Distribution Date, each Right will be exercisable
to purchase, for $300 (the "Purchase Price"), one one-hundredth of a share of
Preferred Stock. The terms and conditions of the Rights are set forth in a
Rights Agreement dated as of September 24, 1999 between the Company and First
Chicago Trust Company of New York, as Rights Agent (as it may be amended from
time to time, the "Rights Agreement").
At any time after any person has become an Acquiring Person (but before
the occurrence of any of the events described in the second succeeding
paragraph), each Right (other than Rights beneficially owned by the Acquiring
Person and certain affiliated persons) will entitle the holder to purchase, for
the Purchase Price, a number of shares of Common Stock having a market value of
twice the Purchase Price.
At any time after any person has become an Acquiring Person (but before
any person becomes the beneficial owner of 50% or more of the outstanding shares
of Common Stock or the occurrence of any of the events described in the next
paragraph), the Board of Directors may exchange all or part of the Rights (other
than Rights beneficially owned by an Acquiring Person and certain affiliated
persons) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right.
If, after any person has become an Acquiring Person, (1) the Company is
involved in a merger or other business combination in which the Company is not
the surviving corporation or its Common Stock is exchanged for other securities
or assets or (2) the Company and/or one or more of its subsidiaries sell or
otherwise transfer assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its subsidiaries, taken as a whole,
then each Right (other than Rights beneficially owned by an Acquiring Person and
certain affiliated persons) will entitle the holder to purchase, for the
Purchase Price, a number of shares of common stock of the other party to such
business combination or sale (or in certain circumstances, an affiliate) having
a market value of twice the Purchase Price.
The Board of Directors may redeem all of the Rights at a price of $.01 per
Right at any time before any person has become an Acquiring Person.
Page 2 of 4 Pages
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The Rights will expire on November 8, 2009, unless earlier exchanged or
redeemed.
For so long as the Rights are redeemable, the Rights Agreement may be
amended in any respect. At any time when the Rights are no longer redeemable,
the Rights Agreement may be amended in any respect that does not adversely
affect Rights holders (other than any Acquiring Person and certain affiliated
persons), cause the Rights Agreement to become amendable other than in
accordance with this sentence or cause the Rights again to become redeemable.
Rights holders have no rights as stockholders of the Company, including
the right to vote and to receive dividends.
The Rights Agreement includes antidilution provisions designed to prevent
efforts to diminish the effectiveness of the Rights.
As of September 30, 1999 there were 149,858,857 shares of Common Stock
outstanding and 23,047,774 shares reserved for issuance under the Company's
stock option plans and for other purposes. Each outstanding share of Common
Stock on the Record Date received one Right. Shares of Common Stock issued after
the Record Date and prior to the Distribution Date will be issued with a Right
attached so that all shares of Common Stock outstanding prior to the
Distribution Date will have Rights attached. 1,729,066 shares of Preferred Stock
have been reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person that attempts to acquire the Company without a
condition to such an offer that a substantial number of the Rights be acquired
or that the Rights be redeemed or declared invalid. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors, since the Rights may be redeemed by the Company as described above.
While the dividend of the Rights will not be taxable to stockholders or to
the Company, stockholders or the Company may, depending upon the circumstances,
recognize taxable income if the Rights become exercisable as set forth above.
The foregoing description of the Rights Agreement is qualified in its
entirety by reference to the full text of the Rights Agreement, which is
attached hereto as Exhibit 1 and incorporated herein by reference.
Item 2. Exhibits
Rights Agreement dated as of September 24, 1999 between Aetna Inc. and
First Chicago Trust Company of New York, as Rights Agent.
Page 3 of 4 Pages
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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 registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
AETNA INC.
By: /s/ Alan M. Bennett
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Name: Alan M. Bennett
Title: Vice President and
Corporate Controller
October 15, 1999
Page 4 of 4 Pages
CONFORMED COPY
RIGHTS AGREEMENT
dated as of
September 24, 1999
between
AETNA INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
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TABLE OF CONTENTS
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PAGE
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SECTION 1. Definitions.......................................................1
SECTION 2. Appointment of Rights Agent.......................................5
SECTION 3. Issue of Right Certificates.......................................6
SECTION 4. Form of Right Certificates........................................7
SECTION 5. Countersignature and Registration.................................8
SECTION 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates................8
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.....9
SECTION 8. Cancellation and Destruction of Right Certificates...............11
SECTION 9. Reservation and Availability of Capital Stock....................11
SECTION 10. Preferred Stock Record Date.....................................12
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights........................................13
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares......21
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..............................................22
SECTION 14. Fractional Rights and Fractional Shares.........................24
SECTION 15. Rights of Action................................................26
SECTION 16. Agreement of Right Holders......................................26
SECTION 17. Right Certificate Holder Not Deemed a Shareholder...............27
SECTION 18. Concerning the Rights Agent.....................................27
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agents.....................................................28
SECTION 20. Duties of Rights Agent..........................................29
SECTION 21. Change of Rights Agent..........................................31
SECTION 22. Issuance of New Right Certificates..............................32
SECTION 23. Redemption......................................................32
SECTION 24. Exchange........................................................33
SECTION 25. Notice of Proposed Actions......................................34
SECTION 26. Notices.........................................................35
SECTION 27. Directors to Review Rights Agreement............................35
SECTION 28. Supplements and Amendments......................................36
SECTION 29. Successors......................................................36
SECTION 30. Determinations and Actions by the Board, etc....................36
SECTION 31. Benefits of this Agreement......................................37
SECTION 32. Severability....................................................37
SECTION 33. Governing Law...................................................37
SECTION 34. Counterparts....................................................37
SECTION 35. Descriptive Headings............................................37
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Exhibit A - Certificate of Designation of Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary Description of the Shareholder Rights Plan
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RIGHTS AGREEMENT
AGREEMENT dated as of September 24, 1999 between Aetna Inc., a
Connecticut corporation (the "Company"), and First Chicago Trust Company of
New York, a New York corporation, as Rights Agent (the "Rights Agent"),
W I T N E S S E T H
WHEREAS, on September 24, 1999 the Board of Directors of the Company
authorized and declared a dividend of one preferred stock purchase right (a
"Right") for each share of Common Stock (as hereinafter defined) outstanding
at the close of business on November 8, 1999 (the "Record Date") and has
authorized the issuance, upon the terms and subject to the conditions
hereinafter set forth, of one Right (subject to adjustment) in respect of each
share of Common Stock issued after the Record Date, each Right representing
the right to purchase, upon the terms and subject to the conditions
hereinafter set forth, one one-hundredth (subject to adjustment) of a share of
Preferred Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions. The following terms, as used herein, have the
following meanings:
"Acquiring Person" means any Person who, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but shall not include an Exempt
Person; provided, however, that (a) if the Board determines in good faith that
a Person who would otherwise be an "Acquiring Person" became the Beneficial
Owner of a number of shares of Common Stock such that the Person would
otherwise qualify as an "Acquiring Person" inadvertently (including, without
limitation, because (i) such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without
any intention of changing or influencing control of the Company, then such
Person shall not be deemed to be or to have become an "Acquiring Person" for
any purposes of this Agreement unless and until such Person shall have failed
to divest itself, as soon as practicable (as determined, in good faith, by the
Board), of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person
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would no longer otherwise qualify as an "Acquiring Person"; and (b) no Person
shall become an "Acquiring Person" as the result of any acquisition of shares
of Common Stock by the Company which, by reducing the number of shares of
Common Stock outstanding, increases the proportionate number of shares of
Common Stock beneficially owned by such Person to 15% or more of the shares of
Common Stock then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding by reason of such share acquisition by the Company and shall
thereafter become the Beneficial Owner of any additional shares of Common
Stock (other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Stock or pursuant to a split or subdivision
of the outstanding Common Stock), then such Person shall be deemed to be an
"Acquiring Person" unless upon becoming the Beneficial Owner of such
additional shares of Common Stock such Person does not beneficially own 15% or
more of the shares of Common Stock then outstanding.
"Affiliate" and "Associate" have the respective meanings ascribed to
such terms in Rule 12b-2 under the Exchange Act as in effect on the date
hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to have "Beneficial Ownership" of and to "beneficially own", any
securities:
(a) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof);
(b) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), 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 or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase, (B) securities which
such Person has a right to acquire upon the exercise of
Rights at any time prior to the time that any Person
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becomes an Acquiring Person or (C) securities issuable upon
the exercise of Rights from and after the time that any
Person becomes an Acquiring Person if such Rights 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 ("Original Rights") or
pursuant to Section 11(i) or Section 11(p) with respect to
an adjustment to Original Rights; or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or otherwise; provided that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially
own", any security under this clause (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A)
arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made
pursuant to the applicable 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
(c) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) and with respect
to which such Person or any of its Affiliates or Associates has any
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy or consent as described in subparagraph (b)(ii) immediately
above) or disposing of any such securities;
provided, however, that no Person who is an officer, director or employee of
an Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned", including, without limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or employee of an Exempt Person.
"Board" means the Board of Directors of the Company.
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"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Close of business" on any given date means 5:00 P.M., New York City
time, on such date; provided that if such date is not a Business Day "close of
business" means 5:00 P.M., New York City time, on the next succeeding Business
Day.
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Company, except that, when used with reference to any Person other than
the Company, "Common Stock" means 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.
"Distribution Date" means the earlier of (a) the close of business on
the tenth day after the Stock Acquisition Date and (b) the close of business
on the tenth Business Day (or such later day as may be designated prior to the
occurrence of a Section 11(a)(ii) Event by action of the Board) after the date
of the commencement of a tender or exchange offer by any Person if, upon
consummation thereof, such Person would be an Acquiring Person; provided,
however, that if either of such dates occurs after the date of this Agreement
and on or prior to the Record Date, then the Distribution Date shall be the
Record Date.
"Exempt Person" shall mean the Company or any Subsidiary of the
Company, in each case including, without limitation, in its fiduciary
capacity, or any employee benefit plan of the Company or of any Subsidiary of
the Company, or any entity or trustee to the extent that such entity or
trustee holds Common Stock for or pursuant to the terms of any such plan or
for the purpose of funding any such plan or funding other employee benefits
for employees of the Company or of any Subsidiary of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" means the earlier of (a) the Final Expiration Date
and (b) the time at which all Rights are redeemed as provided in Section 23 or
exchanged as provided in Section 24.
"Final Expiration Date" means the Close of business on November 8,
2009.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization.
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"Preferred Stock" means the Class B Voting Preferred Stock, Series A,
par value $0.01 per share, of the Company, having the terms set forth in the
Amended and Restated Certificate of Incorporation of the Company, as amended
as of July 19, 1996, relevant excerpts of which are attached hereto as Exhibit
A.
"Purchase Price" means the price (subject to adjustment as provided
herein) at which a holder of a Right may purchase one one-hundredth of a share
of Preferred Stock (subject to adjustment as provided herein) upon exercise of
a Right, which price shall initially be $300.00.
"Section 11(a)(ii) Event" means any event described in the first
clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x), (y) or
(z) of Section 13(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D under the
Exchange Act (or any comparable or successor report)) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such.
"Subsidiary" of any Person means any other Person of which securities
or other ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such first Person.
"Trading Day" means 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.
"Triggering Event" means any Section 11(a)(ii) Event or any Section 13
Event.
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 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. If the Company
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appoints one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall determine.
SECTION 3. Issue of Right Certificates. (a) Prior to the Distribution
Date, (i) the Rights will be evidenced (subject to the penultimate sentence of
this Section 3(a)) by the certificates for the Common Stock or by a current
ownership statement issued with respect to uncertificated Common Stock (an
"Ownership Statement") and not by separate Right Certificates (as hereinafter
defined) and the registered holders of the Common Stock shall be deemed to be
the registered holders of the associated Rights, and (ii) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock. As soon as practicable after the Record Date, the Company will
send a copy of the Summary of Rights substantially in the form of Exhibit C
hereto, 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 any
certificate or Ownership Statement for Common Stock outstanding as of the
Record Date, prior to the Distribution Date, the Rights associated with the
Common Stock represented by such certificate, or covered by such Ownership
Statement, will be evidenced by such certificate, or Ownership Statement,
registered in the names of the holders thereof together with a copy of the
Summary of Rights. Prior to the Distribution Date (or, if earlier, the
Expiration Date), the surrender for transfer of any certificate for Common
Stock outstanding on the Record Date, or the transfer of any Common Stock
outstanding on the Record Date represented by any Ownership Statement, with or
without a copy of the Summary of Rights, shall also constitute the transfer of
the Rights associated with the Common Stock represented thereby.
(b) As soon as practicable after the Company has notified the Rights
Agent of the occurrence of the Distribution Date, the Rights Agent will send,
by first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date (other than
any Acquiring Person or any Affiliate or Associate thereof), at the address of
such holder shown on the records of the Company, one or more Right
Certificates evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. If an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11 the
Company shall, at the time of distribution of the Right Certificates, make the
necessary and appropriate rounding adjustments (in accordance with Section
14(a)) so that Right Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. From and
after the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
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(c) Rights shall be issued in respect of all shares of Common Stock
outstanding as of the Record Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to
the Expiration Date, the Company (i) shall, with respect to shares of Common
Stock so issued or sold (x) pursuant to the exercise of stock options or under
any employee plan or arrangement or (y) upon the exercise, conversion or
exchange of other securities issued by the Company prior to the Distribution
Date and (ii) may, in any other case, if deemed necessary or appropriate by
the Board, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided that no such Right
Certificate shall be issued if, and to the extent that, (i) the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued or (ii) appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
(d) Certificates (or Ownership Statements) issued for Common Stock
after the Record Date but prior to the earlier of the Distribution Date and
the Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This [certificate] [statement] also evidences certain Rights as set
forth in a Rights Agreement between Aetna Inc. and First Chicago
Trust Company of New York, as Rights Agent, dated as of September 24,
1999 and as amended from time to time (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the
Company. The Company will mail to the holder of this [certificate]
[statement] a copy of the Rights Agreement without charge promptly
after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may
be evidenced by separate certificates and no longer be evidenced by
this [certificate] [statement], may be redeemed or exchanged or may
expire. As set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may be null and void.
SECTION 4. Form of Right Certificates. The certificates evidencing
the Rights (and the forms of assignment, election to purchase and certificates
to be printed on the reverse thereof) (the "Right Certificates") shall be
substantially in the form of Exhibit B hereto and may have such marks of
identification or
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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,
rule or regulation 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. The
Right Certificates, whenever distributed, shall be dated as of the Record
Date.
SECTION 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right 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 whose
manual or facsimile signature is affixed to the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates may,
nevertheless, be countersigned by the Rights Agent and issued and delivered
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company. Any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this 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 place
for surrender of Right Certificates upon exercise, transfer or exchange, books
for registration and transfer of the Right Certificates. Such books shall show
with respect to each Right Certificate the name and address of the registered
holder thereof, the number of Rights indicated on the certificate and the
certificate number.
SECTION 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. (a) At any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Certificates may, upon the terms and subject to the conditions set forth in
this Agreement, be transferred or exchanged for another Right Certificate or
Certificates evidencing a like number of Rights as the Right Certificate or
Certificates surrendered. Any registered holder desiring to transfer or
exchange any Right Certificate or Certificates shall surrender such Right
Certificate or Certificates (with, in the case of a transfer, the form of
assignment and certificate on the reverse side thereof duly executed) to the
Rights Agent at the principal
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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 Right Certificate or
Certificates until the registered holder of the Rights has complied with the
requirements of Section 7(e). Upon satisfaction of the foregoing requirements,
the Rights Agent shall, subject to Sections 7(d), 14 and 24, countersign and
deliver to the Person entitled thereto a Right Certificate or Certificates as
so requested. The Company may require payment of a sum sufficient to cover any
transfer tax or other governmental charge that may be imposed in connection
with any transfer or exchange of any Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will issue and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d), 7(e), 9(c), 11(a), 23 and 24) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date upon surrender of
the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the principal office or offices of the Rights Agent designated for such
purpose, together with payment (in lawful money of the United States of
America by certified check or bank draft payable to the order of the Company)
of the aggregate Purchase Price with respect to the Rights then to be
exercised and an amount equal to any applicable transfer tax or other
governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and
subject to Section 20(k), the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock (or make available,
if the Rights Agent is the transfer agent therefor) certificates for the total
number of one one-hundredths of a share of Preferred Stock to be purchased
(and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests) or (B) if the Company shall have elected to deposit
the shares of Preferred Stock issuable upon exercise of the Rights with a
depositary agent, requisition from the depositary agent depositary receipts
representing interests in such number of one
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<PAGE>
one-hundredths of a share of Preferred Stock 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 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 issuance of fractional shares in accordance with Section 14 and (iii)
after receipt of such certificates or depositary receipts and cash, if any,
cause the same to be delivered to or upon the order of the registered holder
of such Right Certificate (with such certificates or receipts registered in
such name or names as may be designated by such holder). If the Company is
obligated to deliver Common Stock, other securities or assets pursuant to this
Agreement, the Company will make all arrangements necessary so that such other
securities and assets are available for delivery by the Rights Agent, if and
when appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Right Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes 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
(or any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or in any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(d)
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 insure that the provisions of this Section 7(d) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates and Associates or any
transferee of any of them hereunder.
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<PAGE>
(e) 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 of Rights upon the occurrence of
any purported transfer pursuant to Section 6 or exercise pursuant to this
Section 7 unless such registered holder (i) shall have completed and signed
the certificate contained in the form of assignment or election to purchase,
as the case may be, set forth on the reverse side of the Right Certificate
surrendered for such transfer or exercise, as the case may be, (ii) shall not
have indicated an affirmative response to clause 1 or 2 thereof and (iii)
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.
SECTION 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for exercise, transfer or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by this Agreement. The Company
shall deliver to the Rights Agent for cancellation, and the Rights Agent shall
cancel, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
SECTION 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Preferred Stock which are authorized but not
outstanding or otherwise reserved for issuance sufficient to permit the
exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of
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 securities reserved for such issuance to be listed on any
such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date,
as the case may
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<PAGE>
be, a registration statement under the Securities Act with respect to the
securities issuable upon exercise of the Rights, (ii) to cause such
registration statement to become effective as soon as practicable after such
filing and (iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or blue sky laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed 90 days after the date set forth in clause
9(c)(i), 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 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 such provision of this Agreement to the contrary, the
Rights shall not be exercisable for securities in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained,
such exercise therefor shall not be permitted under applicable law or a
registration statement in respect of such securities shall not have been
declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all one one-hundredths of a share of
Preferred Stock issuable upon exercise of Rights shall, at the time of
delivery of the certificates for such securities (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 other
governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Preferred Stock
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax or other governmental charge which may be payable in
respect of any transfer involved in the issuance or delivery of any Right
Certificates or of any certificates for Preferred Stock to a Person other than
the registered holder of the applicable Right Certificate, and prior to any
such transfer, issuance or delivery any such tax or other governmental charge
shall have been paid by the holder of such Right Certificate or it shall have
been established to the Company's satisfaction that no such tax or other
governmental charge is due.
SECTION 10. Preferred Stock Record Date. Each Person (other than
the Company) in whose name any certificate for Preferred Stock is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder
of
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<PAGE>
record of such Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
transfer taxes or other governmental charges) was made; provided that if the
date of such surrender and payment is a date upon which the transfer books of
the Company relating to the Preferred Stock are closed, such Person shall be
deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
applicable transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including 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. (a) (i) If the Company shall at any time after the date
of this Agreement (A) pay a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock into a
greater number of shares, (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 involving the Company), the
Purchase Price in effect immediately prior to the record date for such
dividend or the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
other capital stock issuable on such date shall be proportionately adjusted so
that each holder of a Right shall (except as otherwise provided herein,
including Section 7(d)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to such date, the
aggregate number and kind of shares of Preferred Stock or other 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 applicable transfer books of the Company
were open, such holder would have been entitled to receive upon such exercise
and by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which requires an adjustment under both this Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement,
become an Acquiring Person, then each holder of a Right shall (except
as otherwise provided herein, including Section 7(d)) thereafter be
entitled to receive,
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<PAGE>
upon exercise thereof at the Purchase Price in effect immediately
prior to the first occurrence of a Section 11(a)(ii) Event, in lieu
of Preferred Stock, such number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock of the Company
(such shares being referred to herein as the "Adjustment Shares") as
shall be equal to the result obtained by dividing
(x) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence of
a Section 11(a)(ii) Event by the number of one
one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as the
"Purchase Price" for each Right) by
(y) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of Common Stock on
the date of such first occurrence;
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (ii)(x)) and the number of Adjustment Shares so receivable
upon exercise of a Right shall, following the occurrence of such Section
11(a)(ii) Event, be subject to further adjustment as appropriate in accordance
with Section 11(f). From and after the occurrence of a Section 13 Event, any
Rights that theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with Section 13
and not pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock which are authorized
by the Company's certificate of incorporation but not outstanding or
reserved for issuance other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance
with Section 11(a)(ii), the Company shall, with respect to each
Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the Purchase Price then in effect, (A) (to
the extent available) Common Stock and then, (B) (to the extent
available) such number of one one-hundredths of a share of Preferred
Stock as are then equivalent in value to the value of the Adjustment
Shares, and then, if necessary, (C) other equity or debt securities
of the Company, cash or other assets, a reduction in the Purchase
Price or any combination of the foregoing, having an aggregate value
(based upon the advice of a nationally recognized investment banking
firm) equal to the value of the Adjustment Shares; provided that the
Company may, and if the Company shall not have made adequate
provision as required above to deliver value within 30
14
<PAGE>
days following the first occurrence of a Section 11(a)(ii) Event (the
"Substitution Period"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, (1) (to the extent
available) Common Stock and then (2) (to the extent available)
one-hundredths of a share of Preferred Stock and then, if necessary,
(3) other equity or debt securities of the Company, cash or other
assets or any combination of the foregoing, having an aggregate value
(based upon the advice of a nationally recognized investment banking
firm) equal to the excess of the value of the Adjustment Shares over
the Purchase Price. To the extent that the Company determines that
some action is to be taken pursuant to the preceding sentence, the
Company (X) shall provide, subject to Section 7(d), 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 decide the appropriate form and value
of any consideration to be delivered as referred to in the preceding
sentence. If any such suspension occurs, the Company shall issue a
public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the
current market price per share of Common Stock (as determined
pursuant to Section 11(d)) on the date of the first occurrence of a
Section 11(a)(ii) Event; any common stock equivalent shall be deemed
to have the same value as the Common Stock on such date; and the
value of other securities or assets shall be determined pursuant to
Section 11(d)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within 45 calendar days
after such record date) Preferred Stock (or securities having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into or exercisable for Preferred
Stock (or equivalent preferred stock) at a price per share of Preferred Stock
(or equivalent preferred stock) (in each case, taking account of any
conversion or exercise price) less than the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such 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 price (taking account of any conversion
or exercise price) of the total number of shares of Preferred Stock (and/or
equivalent preferred stock) so to be offered would purchase at such
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<PAGE>
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
additional shares of Preferred Stock (and/or equivalent preferred stock) so to
be offered. In case such subscription price may be paid by delivery of
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. 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 if such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger involving the
Company) of evidences of indebtedness, equity securities other than Preferred
Stock, assets (other than a regular periodic cash dividend out of the earnings
or retained earnings of the Company) or rights, options or warrants (excluding
those referred to in Section 11(b)), 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)) per share of Preferred Stock on such record date, less the value (as
determined pursuant to Section 11(d)(iii)) of such evidences of indebtedness,
equity securities, assets, rights, options or warrants so to be distributed
with respect to one share of Preferred Stock and the denominator of which
shall be such current market price per share of Preferred Stock. Such
adjustment shall be made successively whenever such a record date is fixed,
and if such distribution is not so made, 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.
(d) (i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, 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 30
consecutive Trading Days immediately prior to such date; for purposes of
computations made pursuant to Section 11(a)(iii), 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 10 consecutive
Trading Days immediately following such date; and for purposes of computations
made pursuant to Section 14, the "current market price" per share of Common
Stock for any Trading Day
16
<PAGE>
shall be deemed to be the closing price per share of Common Stock for such
Trading Day; provided that if the 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 exercisable for or
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 30 Trading Day or 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, 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 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 Stock Market ("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. 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 (or, if at the time of such
determination there is an Acquiring Person, by a nationally recognized
investment banking firm) shall be used. If the Common Stock is not publicly
held or not so listed or traded, the "current market price" per share means
the fair value per share as determined in good faith by the Board, or, if at
the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm, which 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) (other than the last sentence thereof). If the current
market price per share of Preferred Stock cannot be determined in
such manner, the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an
17
<PAGE>
amount equal to 100 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock occurring after the date of this
Agreement) multiplied by the current market price per share of Common
Stock (as determined pursuant to Section 11(d)(i) (other than the
last sentence thereof)). If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, the "current
market price" per share of the Preferred Stock shall be determined in
the same manner as set forth in the last sentence of Section
11(d)(i). For all purposes of this Agreement, the "current market
price" of one one-hundredth of a share of Preferred Stock shall be
equal to the "current market price" of one share of Preferred Stock
divided by 100.
(iii) For the purpose of any computation hereunder, the value of any
securities or assets other than Common Stock or Preferred Stock shall
be the fair value as determined in good faith by the Board, or, if at
the time of such determination there is an Acquiring Person, by a
nationally recognized investment banking firm which determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(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 1% in the Purchase Price; provided that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred Stock, as the case may
be.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a), the holder of any Right shall be entitled
to receive upon exercise of such Right 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), 11(b), 11(c), 11(e), 11(g), 11(h), 11(i), 11(j), 11(k) and
11(m), and the provisions of Sections 7, 9, 10, 13 and 14 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 hereunder shall evidence the right to purchase, at the
Purchase
18
<PAGE>
Price then in effect, the then applicable number of one one-hundredths of a
share of Preferred Stock or other capital stock of the Company issuable 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 Section 11(b) and 11(c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one
one-hundredths of a share for which a Right was exercisable immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-hundredths of a share of Preferred Stock issuable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which such Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to 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 Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right Certificates
so
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<PAGE>
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 Right 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 one one-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par value, if any, of the number of one
one-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-hundredths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock or other
capital stock of the Company issuable upon such exercise over and above the
number of one one-hundredths of a share of Preferred Stock or other capital
stock of the Company issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided 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 upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their terms
are convertible into or exercisable for Preferred Stock, stock dividends or
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to the holders of its Preferred Stock, shall not
be taxable to such shareholders.
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(n) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate, merge or otherwise combine with
or (ii) sell or otherwise transfer (and/or permit any of its Subsidiaries to
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
other Person or Persons if (x) at the time of or immediately after such
consolidation, merger, combination or sale there are any rights, warrants or
other instruments or securities outstanding or any agreements or arrangements
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, combination or sale, the
shareholders of a Person who constitutes, or would constitute, the "Principal
Party" for the purposes of Section 13 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 Sections 23, 24 and 28, 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 substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if
at any time after the date hereof and prior to the Distribution Date the
Company shall (i) pay a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock
into a larger number of shares 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 as
contemplated by Section 3(c), 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 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.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the
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Common Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, if prior to the Distribution Date,
to each holder of a certificate or Ownership Statement representing shares of
Common Stock) in the manner set forth in Section 26. 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) If, following the occurrence of a Section 11(a)(ii) Event,
directly or indirectly,
(x) the Company shall consolidate with, merge into, or otherwise
combine with, any other Person, and the Company shall not be the
continuing or surviving corporation of such consolidation, merger or
combination,
(y) any Person shall merge into, or otherwise combine with, the
Company, and the Company shall be the continuing or surviving
corporation of such merger or combination and, in connection with
such merger or combination, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for other stock or
securities of the Company or any other Person, cash or any other
property, or
(z) the Company and/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 other Person or Persons,
then, and in each such case, proper provision shall promptly be made so that
(i) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii)
Event, such number of duly authorized, validly issued, fully paid and
nonassessable shares of freely tradeable Common Stock of the
Principal Party (as hereinafter defined), not subject to any rights
of call or first refusal, liens, encumbrances or other claims, as
shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence of
a Section 11(a)(ii) Event by the number of one
one-hundredths of a share of Preferred Stock for which a
Right was exercisable
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immediately prior to such first occurrence (such product
being thereafter referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by
(B) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of the Common Stock
of such Principal Party on the date of consummation of such
consolidation, merger, combination, sale or transfer;
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (i)(A)) and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with Section 11(f) to reflect
any events occurring in respect of the Common Stock of such Principal Party
after the occurrence of such consolidation, merger, sale or transfer;
(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, combination, sale or
transfer, all the obligations and duties of the Company pursuant to
this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions
of Section 11 shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; and
(iv) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its
Common Stock to permit exercise of all outstanding Rights in
accordance with this Section 13(a)) in connection with the
consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section 13(a)(x)
or (y), 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 combination, and if no securities are so issued, the
Person that survives or results from such merger, consolidation or
combination; and
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(ii) in the case of any transaction described in Section 13(a)(z),
the Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such transaction or
transactions;
provided that in any such case, (A) if the Common Stock of such Person is not
at such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other Person; and
(B) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
combination, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which are not
outstanding or otherwise 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
Section 13(a) and 13(b) and providing that, as soon as practicable after the
date of any consolidation, merger, combination, sale or transfer mentioned in
Section 13(a), the Principal Party will:
(i) prepare and file a registration statement under the Securities
Act with respect to the securities issuable upon exercise of the
Rights, and will use its best efforts to cause such registration
statement (A) to become effective as soon as practicable after such
filing and (B) to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration
Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
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 as provided in Section 11(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which
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such fractional Rights would otherwise be issuable an amount in cash equal to
the same fraction of the current market price of a whole Right. For purposes
of this Section 14(a), the current market price of a whole Right shall be the
closing price of a Right for the Trading Day immediately prior to the date on
which such fractional Rights would otherwise have been issuable. The closing
price of a Right 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, 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. If on any such date no such market
maker is making a market in the Rights, the current market price of the Rights
on such date shall be as determined in good faith by the Board, or, if at the
time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are multiples of one one-hundredth of a share of
Preferred Stock). In lieu of any such fractional shares of Preferred Stock,
the Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market price of one one-hundredth of a share
of Preferred Stock. For purposes of this Section 14(b), the current market
price of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(i)) for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of any Triggering Event or upon any
exchange pursuant to Section 24, 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 shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
or exchanged as
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herein provided an amount in cash equal to the same fraction of the current
market price of a share of Common Stock. For purposes of this Section 14(c),
the current market price of a share of Common Stock shall be the closing price
of a share of Common Stock (as determined pursuant to Section 11(d)(i)) for
the Trading Day immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right except as 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 Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of any certificate
representing Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
any certificate representing 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 Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right 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) subject to Sections 6 and 7, the Company and the Rights Agent
may deem and treat the Person in whose name a Right Certificate
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<PAGE>
(or, prior to the Distribution Date, a certificate representing
shares of Common Stock) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the certificate
representing shares of Common Stock 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(d), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use
its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
SECTION 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital
stock which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a shareholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
SECTION 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 counsel fees and disbursements and other disbursements
incurred in the execution or administration 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
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<PAGE>
Rights Agent, for anything done or omitted by the Rights Agent in connection
with the administration of this Agreement or the exercise or performance of
its duties hereunder, including the costs and expenses of defending against
any claim of liability.
(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 the administration of this Agreement or the exercise or performance of
its duties hereunder in reliance upon any Right 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,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agents. (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 or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
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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 Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact
or matter (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, suffering or
omitting to take 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 Chief Executive Officer, the Chief
Financial Officer, the Corporate Secretary or any designees of any
such officer and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken,
suffered or omitted 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
the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant
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to Section 7(d)) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in
Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after 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 Right Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when
issued, be duly authorized, validly 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 Chief Executive Officer, the Chief Financial Officer, the
Corporate Secretary or any designees of any such officer 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, suffered or
omitted to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not the Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the
Company or to any holders of Rights resulting from any such act,
default, neglect or
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misconduct, provided that reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the cases
may be, has either not been completed or indicates an affirmative
response to clause 1 or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise or
transfer without first consulting with the Company.
SECTION 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified mail,
and, subsequent to the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any
state of the United States, in good standing, which is authorized under the
laws of the State of New York to exercise stock transfer or 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
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$50,000,000 or (b) an Affiliate of a corporation described in clause 21(a).
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 that 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, subsequent to the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21, or
any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares of stock or
assets issuable upon exercise of the Rights made in accordance with the
provisions of this Agreement.
SECTION 23. Redemption. (a) The Board may, at its option, at any time
prior to the earlier of (i) the occurrence of a Section 11(a)(ii) Event and
(ii) the Final Expiration Date, redeem all of but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, as such amount may
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"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish. The Redemption
Price shall be payable, at the option of the Company, in cash, shares of
Common Stock, or such other form of consideration as the Board shall
determine.
(b) Immediately upon the action of the Board electing to redeem the
Rights (or at such later time as the Board may establish for the effectiveness
of such redemption), and without any further action and without any notice,
the right to exercise the Rights will terminate and thereafter the only right
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. The Company shall promptly thereafter give notice of such
redemption to the Rights Agent and the holders of the Rights in the manner set
forth in Section 26; provided that the failure to give, or any defect in, such
notice shall not affect the validity of such redemption. Any notice which is
mailed in the manner herein
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provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of
the Redemption Price will be made.
SECTION 24. Exchange. (a) At any time after the occurrence of a
Section 11(a)(ii) Event, the Board may, at its option, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to Section 7(d)) for shares of Common Stock at
an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board
shall not be empowered to effect such exchange at any time after an Acquiring
Person together with all Affiliates and Associates of such Acquiring Person,
becomes the Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding. From and after the occurrence of a Section 13 Event, any Rights
that theretofore have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board
electing to exchange any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights will
terminate and thereafter the only right of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly thereafter give notice of such exchange to the Rights Agent and the
holders of the Rights to be exchanged in the manner set forth in Section 26;
provided that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to Section 7(d)) held by
each holder of Rights.
(c) The Company may at its option substitute, and, in the event that
there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit the exchange of Rights for
Common Stock ordered in accordance with Section 24(a), the Company shall
substitute to the
33
<PAGE>
extent of such insufficiency, for each share of Common Stock that would
otherwise be issuable upon exchange of a Right, a number of one-one hundredths
of a share of Preferred Stock such that the current market price (determined
pursuant to Section 11(d)) of such number of one-one hundredths of a share of
Preferred Stock is equal to the current market price (determined pursuant to
Section 11(d)) of one share of Common Stock as of the date of such exchange.
SECTION 25. Notice of Proposed Actions. (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 out of earnings or retained earnings of the Company),
or (ii) to offer to the holders of its 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 or combination of outstanding
shares of Preferred Stock) or (iv) to effect any consolidation or merger with
any other Person, or to effect and/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 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, 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 Right, to the extent feasible
and in accordance with Section 26, a notice of such proposed action, which
shall specify the record date for the purposes of any such dividend,
distribution or offering of rights or warrants, or the date on which any such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation
therein by the holders of Preferred Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
25(a)(i) or 25(a)(ii) above at least 20 days prior to the record date for
determining holders of the Preferred Stock entitled to participate in such
dividend, distribution or offering, and in the case of any such other action,
at least 20 days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of Preferred Stock, whichever
shall be the earlier. The failure to give notice required by this Section or
any defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a public filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the
holders of
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securities of the Company, including the Rights, for purposes of this
Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case, (i)
the Company shall as soon as practicable thereafter give to each holder of a
Right, in accordance with Section 26, 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) or 13, as the case may be, and (ii)
all references in Section 25(a) to Preferred Stock shall be deemed thereafter
to refer to Common Stock or other capital stock, as the case may be.
SECTION 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right to or on
the Company shall be sufficiently given or made if sent by first-class mail
(postage prepaid) to the address of the Company indicated on the signature
page hereof or such other address as the Company shall specify in writing to
the Rights Agent. 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 Right to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail (postage prepaid) to the address of the
Rights Agent indicated on the signature page hereof or such other address as
the Rights Agent shall specify in writing to the Company. Notices or demands
authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right Certificate (or, prior to the Distribution
Date, to the holder of any certificate or Ownership Statement representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the address of such holder shown on the
registry books of the Company.
SECTION 27. Directors to Review Rights Agreement. It is understood
that the Independent Directors Committee (as defined below) of the Board shall
review and evaluate this Rights Agreement in order to consider whether the
maintenance of this Rights Agreement continues to be in the interests of the
Company, its shareholders and any other relevant constituencies of the
Company, at least once every three years. Following each such review, the
Independent Directors Committee will communicate its conclusions to the full
Board, including any recommendation in light thereof as to whether this Rights
Agreement should be modified or the rights should be redeemed. The Independent
Directors Committee shall, subject to the final proviso of this sentence, be
comprised of all of the directors of the Company who are independent of the
management of the Company and free from any relationship that, in the opinion
of the Board, would interfere with the exercise of independent judgment as a
member of the Independent Director Committee; provided that any director who
is an officer or employee of the Company or its subsidiaries shall not
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<PAGE>
qualify for membership in the Independent Director Committee; provided,
however, that a director who was formerly an officer of the Company or any of
its subsidiaries may qualify for membership even though he or she may be
receiving pension or deferred compensation payments from the Company if, in
the opinion of the Board, such person will exercise independent judgment and
will materially assist the function of the Independent Director Committee;
provided, however, that a majority of the Independent Director Committee
shall, at all times, consist of directors who were not formerly officers of
the Company or any of its subsidiaries.
SECTION 28. Supplements and Amendments. For so long as the Rights are
then redeemable, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of shares of Common Stock. At any time
when the Rights are no longer redeemable, the Company may, and the Rights
Agent shall if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights; provided, however, that no such
supplement or amendment may (a) adversely affect the interests of the holders
of Rights as such (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person), (b) cause this Agreement again to become amendable
other than in accordance with this sentence, or (c) cause the Rights again to
become redeemable. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section, the Rights Agent shall
execute such supplement or amendment.
SECTION 29. 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 30. Determinations and Actions by the Board, 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) under the Exchange Act as in
effect on the date of this Agreement. The Board shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including 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
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determination to redeem or exchange or not to redeem or exchange the Rights or
to amend the Agreement).
SECTION 31. 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 Right Certificates (and, prior to the
Distribution Date, the certificates or Ownership Statements representing the
shares of 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 Right
Certificates (and, prior to the Distribution Date, the certificates or
Ownership Statements representing the shares of Common Stock).
SECTION 32. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
SECTION 33. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Connecticut and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State, except that the rights and
obligations of the Rights Agent shall be governed by the laws of the State of
New York.
SECTION 34. 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
one and the same instrument.
SECTION 35. Descriptive Headings. The captions herein are included for
convenience of reference only, do not constitute a part of this Agreement and
shall be ignored in the construction and interpretation hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
AETNA INC.
By: /s/ Alan J. Weber
---------------------------------------
Name: Alan J. Weber
Title: Vice Chairman and
Chief Financial Officer
151 Farmington Avenue
Hartford, Connecticut 06156
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By: /s/ Joanne Gorostiola
---------------------------------------
Name: Joanne Gorostiola
Title: Assistant Vice President
525 Washington Blvd., Suite 4660
Jersey City, New Jersey 07310
Attention: Corporate Actions
Administration
<PAGE>
EXHIBIT A
Provisions Applicable to the 15,000,000 Authorized Shares of
Class B Voting Preferred Stock
The 15,000,000 shares of authorized Class B Voting Preferred Stock, $.01 par
value per share, of the Company shall constitute a single class with the
following terms, limitations and relative rights and preferences:
1. Dividends. The holders of any series of the Class B Voting
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors, preferential dividends at such rates and payable on such
dividend payment dates in each year as shall be established for such series,
such dividends to be payable to holders of the Class B Voting Preferred Stock
of record on such dates as may be fixed by said Board, but not more than 70
days before each dividend payment date; provided, however, that dividends
shall not be declared or paid on any Class B Voting Preferred Stock for any
dividend period unless dividends have been or are contemporaneously declared
or paid to the same pro rata extent on the outstanding preferred stock of all
series of all classes ranking on a parity with the Class B Voting Preferred
Stock as to payment of dividends for all dividend periods terminating on the
same or an earlier date.
Dividends on each share of any series of the Class B Voting
Preferred Stock shall accrue and be cumulative, if so provided for in such
series, from the date of issue thereof or from such other date as may be
provided for in such series.
Whenever dividends payable on the Class B Voting Preferred Stock as
provided herein are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Class B
Voting Preferred Stock outstanding shall have been paid in full, the Company
shall not:
(a) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Class B Voting Preferred Stock;
(b) declare or pay dividends, 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 Class B Voting Preferred
Stock except dividends paid ratably on the Class B Voting 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; or
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(c) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Class B Voting Preferred Stock
provided that the Company may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Company ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Class B Voting Preferred Stock.
2. Liquidation. The holders of shares of any series of the Class B
Voting Preferred Stock shall receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company the respective amounts
established for such series. If the net assets of the Company shall be
insufficient to pay said amounts in full together with the aggregate
liquidation preference for the outstanding shares of preferred stock of all
other classes ranking on a parity with the Class B Voting Preferred Stock as
to payments upon liquidation, then the entire net assets of the Company shall
be distributed among the holders of preferred stock of all such classes, who
shall receive a common percentage of the full respective preferential amounts.
Neither the consolidation nor the merger of the Company with or into another
corporation or corporations, nor the sale or transfer by the Company of all or
any part of its assets, shall be deemed a liquidation, dissolution or winding
up of the Company.
3. Redemption and Purchase. Subject to any restriction contained in
the terms of any particular series of the Class B Voting Preferred Stock, all
or any part of any series of the Class B Voting Preferred Stock at any time
outstanding may be called for redemption at any time at the applicable
redemption price provided for in such series and in the manner herein below
provided. All or any part of any series of the Class B Voting Preferred Stock
may be called for redemption in accordance with the terms of such series
without calling any part or all of any other series of the Class B Voting
Preferred Stock. If less than all of any such series of the Class B Voting
Preferred Stock is so called, the shares of such series of the Class B Voting
Preferred Stock to be called shall be selected by lot or pro rata or by any
other means the Board of Directors deems equitable, all as determined by the
Board of Directors.
Except for a mandatory redemption provided for in any series of the
Class B Voting Preferred Stock, (i) no call for redemption of less than all of
the Class B Voting Preferred Stock outstanding shall be made without paying or
setting aside for payment an amount equal to the cumulative dividends accrued
and unpaid to the last preceding dividend date on all of the Class B Voting
Preferred Stock then outstanding and not called and (ii) no redemption of less
than all of the Class B Voting Preferred Stock outstanding shall be made
without paying or setting aside for payment an amount equal to the cumulative
dividends accrued and unpaid to
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the dividend date that coincides with or last precedes such redemption date on
all the Class B Voting Preferred Stock then outstanding and not called.
Except as otherwise provided in any series of the Class B Voting
Preferred Stock, notice of each such call, specifying the shares called for
redemption, the redemption date and the place where the redemption price of
the stock so called is payable, and, if any series of such stock is
convertible, the date upon which the conversion rights of the shares of such
series being redeemed will expire, shall be mailed by or on behalf of the
Company not less than 30 days before the redemption date or the date upon
which conversion rights of such shares will expire when called for redemption,
whichever is earlier, to each holder of stock so called at such holder's
address as it appears upon the books of the Company.
If notice of such call shall have been duly given as aforesaid and
if, on or before the redemption date designated in such notice, the funds
necessary for the redemption shall have been set aside so as to be and
continue to be available therefor, then notwithstanding that any certificate
of the Class B Voting Preferred Stock so called for redemption shall not have
been surrendered for cancellation, the dividends thereon shall cease to accrue
from and after the date of redemption so designated, and all rights with
respect to the shares of the Class B Voting Preferred Stock so called for
redemption shall forthwith after such redemption date cease and terminate,
except only the right of the holders thereof to receive the redemption price
of such shares without interest.
The Company may, however, at any time prior to the redemption date
specified in the notice of redemption deposit in trust, for the account of the
holders of the shares of the Class B Voting Preferred Stock to be redeemed,
with a bank or trust company in good standing named in the notice of
redemption, all funds necessary for the redemption, and deliver in writing
irrevocable instructions and authority directing such bank or trust company on
behalf of and at the expense of the Company to cause notice of such redemption
to be duly mailed as provided above promptly after receipt of such irrevocable
instructions and authority and to pay the redemption price to the holders of
the shares of the Class B Voting Preferred Stock to be redeemed, and
thereupon, notwithstanding that any certificate for the shares of the Class B
Voting Preferred Stock so called for redemption shall not have been
surrendered for cancellation, all shares of the Class B Voting Preferred Stock
with respect to which the deposit shall have been made shall no longer be
deemed outstanding and all rights with respect to such shares shall cease and
terminate, except only the right of the holders thereof to receive from such
bank or trust company the redemption price of such shares without interest,
and with respect to any series of such stock entitled to conversion rights, to
exercise such conversion rights. Any moneys so deposited for the redemption of
shares of the Class B Voting Preferred Stock which shall be
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converted prior to the redemption date shall be repaid to the Company
immediately following such conversion. Any amount earned on funds so deposited
shall be paid to the Company from time to time.
Any funds so set aside or deposited, as the case may be, and
unclaimed at the end of six years from such redemption date shall be released
and repaid to the Company upon its request after which the holders of the
shares so called for redemption shall look only to the Company for the payment
thereof without interest.
4. Conversion. Shares of any series of the Class B Voting Preferred
Stock may be convertible into or exchangeable for Common Stock or other
securities or assets of the Company or any other issuer to the extent, but
only to the extent, if any, as may be provided for in such series.
5. Voting Rights. Subject to the provision for adjustment hereinafter
set forth, each share of Class B Voting Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Company. In the event the Company shall at any time after
July 19, 1996 (a) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (b) split up or divide the outstanding
shares of Common Stock, (c) combine the outstanding shares of Common Stock
into a smaller number of shares, or (d) issue any shares of its capital stock
in a reclassification of the outstanding shares of Common Stock (including any
such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), then, in each such
case, and regardless of whether any shares of Class B Voting Preferred Stock
are then issued or outstanding, the number of votes per share to which each
holder of shares of Class B Voting Preferred Stock would be 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.
Except as otherwise provided herein or by law, the holders of
shares of Class B Voting Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote of
shareholders of the Company.
Except as set forth herein, or as required by law, holders of Class
B Voting 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.
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The Certificate of Incorporation shall not be amended in any manner
which would materially alter or change the powers, preferences or special
rights of the Class B Voting Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least a majority of the
outstanding shares of Class B Voting Preferred Stock, voting separately as a
class.
6. Consolidation, Merger, Etc. (a) In case the Company 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 each share
of Class B Voting Preferred Stock shall at the same time be similarly
exchanged for or changed into an amount per share, subject to the provision
for adjustment set forth in subsection (b) of this Section 6, equal to 100
times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
(b) In the event the Company shall at any time after July 19, 1996
(i) declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) split up or divide the outstanding shares of
Common Stock, (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such case,
and regardless of whether any shares of Class B Voting Preferred Stock are
then issued or outstanding, the amount per share to which each holder of
shares of Class B Voting Preferred Stock would be entitled immediately prior
to such event under subsection (a) of this Section 6 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.
7. Transfer Agent. The Company shall always have at least one
transfer agent for the Class B Voting Preferred Stock, which may be the
Company or a bank or trust company in good standing.
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Provisions Applicable to the
Class B Voting Preferred Stock, Series A
There is hereby established a series of the Company's Class B Voting Preferred
Stock, par value $.01 per share, designated and hereinafter referred to as
"Class B Voting Preferred Stock, Series A," the authorized number of shares of
which series shall be 5,000,000 and the terms of which series shall be as
follows:
1. Dividends. (a) The holders of shares of Class B Voting Preferred
Stock, Series A shall be entitled to receive cumulative quarterly dividends
payable in cash (or in kind to the extent provided below) on the fifteenth 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 of
Class B Voting Preferred Stock, Series A (the "First Quarterly Dividend
Payment Date"), in an amount per share (rounded to the nearest cent), subject
to the provision for adjustment hereinafter set forth, equal to 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock on or since the immediately preceding
Quarterly Dividend Declaration Date, as defined below, or, with respect to the
first Quarterly Dividend Declaration Date, since the first issuance of any
share of Class B Voting Preferred Stock, Series A. In the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Declaration Date and the next subsequent
Quarterly Dividend Declaration Date, the holders of shares of Class B Voting
Preferred Stock, Series A shall be entitled to receive a dividend of $0.01 per
share on the next subsequent Quarterly Dividend Payment Date. The Company
shall declare a dividend on the Class B Voting Preferred Stock, Series A on
the fifth day of March, June, September and December of each year (each such
date being referred to herein as a "Quarterly Dividend Declaration Date"),
commencing on the first Quarterly Dividend Declaration Date after the first
issuance of a share of Class B Voting Preferred Stock, Series A. In the event
the Company shall at any time after July 19, 1996 (i) declare a dividend on
the outstanding shares of Common Stock payable in shares of Common Stock, (ii)
split up or divide the outstanding shares of Common Stock, (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the outstanding
shares of Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such case, and
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regardless of whether any shares of Class B Voting Preferred Stock, Series A
are then issued or outstanding, the amount per share to which each holder of
shares of Class B Voting Preferred Stock, Series A would be entitled
immediately prior to such event under the first sentence of this Section 1(a)
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) Dividends shall begin to accrue and be cumulative on
outstanding shares of Class B Voting Preferred Stock, Series A from the
Quarterly Dividend Payment Date next preceding the date of issue of such
shares: (i) 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 the first issuance of a
share of Class B Voting Preferred Stock, Series A; or (ii) 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 Class B Voting Preferred Stock,
Series A 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
Class B Voting Preferred Stock, Series A in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The board of Directors may fix a record date for the
determination of holders of shares of Class B Voting Preferred Stock, Series A
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than 70 calendar days prior to the date
fixed for the payment thereof.
2. Redemption. The shares of Class B Voting Preferred Stock, Series A
shall not be redeemable.
3. Liquidation. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, no distribution or payment shall be
made (a) to the holders of Common Stock or any other shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Class B Voting Preferred Stock, Series A, unless prior thereto, the
holders of shares of Class B Voting Preferred Stock, Series A shall have
received an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of Common Stock, plus an amount equal to
all accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such
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payment, or (b) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Class B
Voting Preferred Stock, Series A, except distributions made ratably on the
Class B Voting Preferred Stock, Series A and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In the event the
Company shall at any time after July 19, 1996 (a) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (b)
split up or divide the outstanding shares of Common Stock, (c) combine the
outstanding shares of Common Stock into a smaller number of shares, or (d)
issue any shares of its capital stock in a reclassification of the outstanding
shares of Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such case, and regardless of whether any shares of
Class B Voting Preferred Stock, Series A are then issued or outstanding, the
aggregate amount per share to which each holder of shares of Class B Voting
Preferred Stock, Series A would be entitled immediately prior to such event
under the provision in clause (a) 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.
4. No Conversion Rights. Holders of shares of Class B Voting
Preferred Stock, Series A shall have no right to convert such shares into or
exchange them for shares of Common Stock, or other securities or assets of the
Company or any other issuer.
5. Reacquired Shares. Any shares of Class B Voting Preferred Stock,
Series A purchased or otherwise acquired by the Company in any manner
whatsoever shall not be canceled but shall be held as treasury shares until
retired, cancelled or reissued by action of the Board of Directors.
A-8
<PAGE>
EXHIBIT B
(Form of Right Certificate)
Certificate No. R- __________________Rights
NOT EXERCISABLE AFTER NOVEMBER 8, 2009, OR EARLIER IF REDEEMED. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED
IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
AETNA INC.
This certifies that ____________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of September 24, 1999 (the "Rights Agreement")
between Aetna Inc., a Connecticut corporation (the "Company"), and First
Chicago Trust Company of New York, a New York corporation (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Eastern time) on November 8, 2009 at the principal office of the Rights Agent
or its successor as Rights Agent, one one-hundredth of a fully paid and
nonassessable share of the Class B Voting Preferred Stock, Series A, par value
$.01 per share (the "Preferred Shares"), of the Company, at a purchase price
of $300.00 per one one-hundredth of a Preferred Share (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase and related Certificate duly executed. The number of
Rights evidenced by this Right Certificate (and the number of Preferred Shares
which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per one one-hundredth of a Preferred Share set forth above, are
the number and Purchase Price as of [
B-1
<PAGE>
], 1999. No Right is exercisable at any time prior to the
Distribution Date (as such term is defined in the Rights Agreement).
As provided in the Rights Agreement, the Purchase Price and the number
and kind of securities which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events, and the Rights are subject to amendment,
redemption and certain other events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the above-mentioned office of
the Rights Agent.
Pursuant to the Rights Agreement, from and after the later of the
Distribution Date and the first occurrence of a Section 11(a)(ii) Event (as
such term is defined in the Rights Agreement), (i) any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any Affiliate or
Associate of such Acquiring Person, or any transferee of any such Person)
shall be void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of the Rights Agreement, (ii) no
Right Certificate shall be issued pursuant to the Rights Agreement that
represents Rights beneficially owned by any Acquiring Person or any Affiliate
or Associate thereof, (iii) no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person or any Affiliate or
Associate thereof or to any nominee of such Acquiring Person or Affiliate or
Associate thereof, and (iv) any Right Certificate delivered to the Rights
Agent for transfer to an Acquiring Person or any Affiliate or Associate
thereof shall be canceled.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates entitling the holder to purchase a like aggregate number of
Preferred Shares (or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
B-2
<PAGE>
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 $0.01 per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby. Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the election of
the Company, be evidenced by depositary receipts. In lieu of issuing
fractional Preferred Shares, the Company may make a cash payment, as provided
in the Rights Agreement, or take such other action permissible under
applicable law as the Company's Board of Directors deems appropriate.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any Purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise of the Right or Rights represented hereby, nor shall
anything contained herein or in the Rights Agreement be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement),
or to receive dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
B-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officer.
Dated as of
AETNA INC.
By:_______________________________________
Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
as Rights Agent
By:__________________________________
Authorized Signature
B-4
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder desires
to transfer the Right Certificate.)
FOR VALUE RECEIVED_____________________________________________________________
hereby sells, assigns and transfers unto_______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________________, ____
________________________________
Signature
Signature Guaranteed:
B-5
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ___are ___are
not being assigned 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 in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it ___did ___did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, ____ ________________________________
Signature
------------------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
------------------
B-6
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights
represented by the Right Certificate.)
To: AETNA INC.
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase shares of Class B
Voting Preferred Stock, Series A 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 securities 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 Right Certificate, a new Right Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: ________________, ____
________________________________
Signature
Signature Guaranteed:
B-7
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ___are ___are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it ___did ___did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ____________, ____ ________________________________
Signature
------------------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
------------------
B-8
<PAGE>
EXHIBIT C
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR TRANSFERRED TO, OR HELD
BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BE NULL AND VOID.
SUMMARY OF RIGHTS
AETNA INC.
SHAREHOLDER RIGHTS PLAN
Summary of Terms
New Rights Plan The Board of Directors has adopted a new
Rights Agreement which is substantially similar to
the Rights Agreement between the Company and First
Chicago Trust Company of New York, dated as of
June 28, 1996, which by its terms expires on
November 8, 1999.
Form of Security The Board has declared a dividend of one preferred
stock purchase right for each outstanding share of
the Company's Common Stock, payable to holders
of record as of the close of business on
November 8, 1999 (each a "Right" and
collectively, the "Rights")
C-1
<PAGE>
Transfer Prior to the Distribution Date1, generally will be
evidenced by the certificates for or ownership
statement representing an interest in the Common
Stock and will be transferred with the Common
Stock, and the registered holders of the Common
Stock will be deemed to be the registered holders
of the Rights.
After the Distribution Date, the Rights
Agent will mail separate certificates
evidencing the Rights to each record
holder of the Common Stock as of the close
of business on the Distribution Date, and
thereafter the Rights will be transferable
separately from the Common Stock.
Exercise Prior to the Distribution Date, the Rights
will not be exercisable.
After the Distribution Date, prior to the
occurrence of an event described below
under "Flip-In" and "Flip-Over", each
Right will be exercisable to purchase, for
$300.00 (the "Purchase Price"), one
one-hundredth of a share of Class B Voting
Preferred Stock, Series A, $.01 par value
per share, of the Company.
Flip-In Subject to certain exceptions, if any person or
group (an "Acquiring Person") becomes the
beneficial owner of 15% or more of the Company's
Common Stock, then each Right (other than Rights
beneficially owned by the Acquiring Person and
certain affiliated persons) will entitle the
holder to purchase, for the Purchase Price, a
number of
- ---------------
1 Distribution Date generally means the earlier of:
(1) the 10th day after public announcement that any person or group
has become the beneficial owner of 15% or more of the Company's
Common Stock; and
(2) the 10th business day after the date of the commencement of a
tender or exchange offer by any person which would, if consummated,
result in such person becoming the beneficial owner of 15% or more of
the Company's Common Stock.
C-2
<PAGE>
shares of the Company's Common Stock
having a market value of twice the
Purchase Price.
Flip-Over If, after any person has become an Acquiring
Person, (1) the Company is involved in a merger
or other business combination in which the
Company is not the surviving corporation or its
Common Stock is exchanged for other securities
or assets or (2) the Company and/or one or more
of its subsidiaries sell or otherwise transfer
assets or earning power aggregating more than
50% of the assets or earning power of the
Company and its subsidiaries, taken as a whole,
then each Right will entitle the holder to
purchase, for the Purchase Price, a number of
shares of common stock of the other party to
such business combination or sale (or in certain
circumstances, an affiliate) having a market
value of twice the Purchase Price.
Exchange At any time after any person has become an
Acquiring Person (but before any person becomes
the beneficial owner of 50% or more of the
Company's Common Stock), the Board may exchange
all or part of the Rights (other than the Rights
beneficially owned by the Acquiring Person and
certain affiliated persons) for shares of the
Company's Common Stock at an exchange ratio of
one share of Common Stock per Right.
Redemption The Board may redeem all of the Rights at
a price of $0.01 per Right at any time prior to
the time that any person becomes an Acquiring
Person.
Periodic Review A committee of independent directors
will review the Rights Agreement at least once
every three years and recommend to the Company's
Board whether the Plan should be amended or the
Rights redeemed.
Expiration The Rights will expire on November 8,
2009, unless earlier exchanged or redeemed.
C-3
<PAGE>
Amendments For so long as the Rights are redeemable, the
Rights Agreement may be amended in any respect.
At any time after the Rights are no longer
redeemable, the Rights Agreement may not be
amended in any respect that would adversely
affect the Rights holders (other than any
Acquiring Person and certain affiliated persons)
or cause the Rights again to become redeemable.
Voting Rights A holder of Rights only has no rights
as a shareholder of the Company, including the
right to vote and to receive dividends.
Antidilution Provisions The Rights Agreement includes
standard antidilution provisions designed to
protect the efficacy of the Rights.
Taxes While the dividend of the Rights will not
be taxable to shareholders or to the Company,
shareholders or the Company may, depending upon
the circumstances, recognize taxable income in
the event that the Rights become exercisable as
set forth above.
------------------
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of
the Rights Agreement is available free of charge from 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, as amended
from time to time, the complete terms of which are hereby incorporated by
reference.
------------------
C-4
