<PAGE> 1
As filed with the Securities and Exchange Commission on September 11, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MERITOR AUTOMOTIVE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
Delaware 38-3354643
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2135 West Maple Road 48084-7186
Troy, Michigan (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
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MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
(FULL TITLE OF THE PLAN)
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DAVID W. GREENFIELD, Esq.
Senior Vice President, General Counsel and Secretary
Meritor Automotive, Inc.
2135 West Maple Road
Troy, Michigan 48084-7186
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(248) 435-1000
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Copy to:
PETER R. KOLYER, Esq.
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
(212) 408-5100
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE (1) FEE
<S> <C> <C> <C> <C>
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Common Stock, par value $1 per share
(including the associated
Preferred Share Purchase Rights)
(the Common Stock)(2)............. 1,500,000 shares $9.07 $13,605,000 $4,123
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act of 1933, as amended (the
Securities Act), based on (a) the book value as of June 30, 1997 of the assets
to be received by the Registrant in the initial transaction in which the
Registrant's securities registered under the Securities Exchange Act of 1934, as
amended (the Exchange Act), pursuant to the Registrant's Registration Statement
on Form 10, as amended (File No. 1-13093), will be issued, divided by (b) the
number of shares of Common Stock estimated to be outstanding after such initial
issuance.
(2) In addition, pursuant to Rule 416(c) under the Securities Act, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
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<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following document, which has been filed with the Securities and
Exchange Commission (the Commission), is incorporated herein by reference and
made a part hereof:
Registration Statement on Form 10, as amended, pursuant to Section 12(b) of
the Exchange Act, filed by Meritor Automotive, Inc. (the Company) in File
No. 1-13093 (the Form 10). The description of the Company's Common Stock is
contained in Item 11 of the Form 10.
All documents subsequently filed by the Company and the Meritor Automotive,
Inc. Savings Plan (the Plan) pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated herein
by reference and be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes that statement. Any such statement so
modified or superseded shall not constitute a part of this Registration
Statement, except as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
This Item is not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
David W. Greenfield, Esq., who has passed upon the legality of any newly
issued Common Stock of the Company covered by this Registration Statement, is
Senior Vice President, General Counsel and Secretary of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law permits Delaware corporations to
eliminate or limit the monetary liability of directors for breach of their
fiduciary duty of care, subject to certain limitations. The Company's Restated
Certificate of Incorporation provides that Company directors are not liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) for willful or negligent violation of the laws governing the
payment of dividends or the purchase or redemption of stock or (iv) for any
transaction from which a director derived an improper personal benefit.
The Delaware General Corporation Law provides for indemnification of
directors, officers, employees and agents subject to certain limitations. The
Company's Amended By-Laws and the appendix thereto provide for the
indemnification of directors, officers, employees and agents of the Company to
the extent permitted by Delaware law. It is expected that the Company's
directors and officers will be insured against certain liabilities for actions
taken in such capacities, including liabilities under the Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
This Item is not applicable.
II-1
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ITEM 8. EXHIBITS.
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4.1 Restated Certificate of Incorporation of the Company.
4.2 Amended By-laws of the Company.
4.3 Rights Agreement, dated as of September 8, 1997, by and between the Company and
First Chicago Trust Company of New York as Rights Agent.
5.1 Opinion of David W. Greenfield, Esq., Senior Vice President, General Counsel and
Secretary of the Company, as to the legality of any newly-issued Common Stock of the
Company covered by this Registration Statement.
5.2 In lieu of an opinion concerning compliance with the requirements of the Employee
Retirement Income Security Act of 1974, as amended, or a determination letter of the
Internal Revenue Service (the IRS) that the Plan is qualified under Section 401 of
the Internal Revenue Code, the Company hereby undertakes to submit the Plan and any
amendment thereto to the IRS in a timely manner and to make all changes required by
the IRS in order to qualify the Plan.
23.1 Consent of David W. Greenfield, Esq., Senior Vice President, General Counsel and
Secretary of the Company, contained in his opinion filed as Exhibit 5.1 to this
Registration Statement.
23.2 Consent of Chadbourne & Parke LLP set forth on page II-6 of this Registration
Statement.
23.3 Consent of James P. O'Shaughnessy, Esq., set forth on page II-6 of this Registration
Statement.
23.4 Consent of Deloitte & Touche LLP, independent auditors, set forth on page II-7 of
this Registration Statement.
24 Power of Attorney authorizing certain persons to sign this Registration Statement
and amendments thereto on behalf of certain directors and officers of the Company.
</TABLE>
II-2
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ITEM 9. UNDERTAKINGS.
A. The Company and the Plan hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (i) and (ii) do not
apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed with or
furnished to the Commission by the Company pursuant to Section 13 or 15(d)
of the Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and each filing of the Plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
B. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
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SIGNATURES
THE REGISTRANT. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-8 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF TROY, STATE OF MICHIGAN ON THE 11TH DAY OF
SEPTEMBER, 1997.
MERITOR AUTOMOTIVE, INC.
By /s/ DAVID W. GREENFIELD
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(DAVID W. GREENFIELD, SENIOR VICE
PRESIDENT, GENERAL COUNSEL
AND SECRETARY)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED ON THE 11TH DAY OF SEPTEMBER, 1997 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
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SIGNATURE TITLE
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<S> <C>
LARRY D. YOST* Chairman of the Board and Chief Executive
Officer (principal executive officer) and Director
JOSEPH B. ANDERSON, JR.* Director
DONALD R. BEALL* Director
JOHN J. CREEDON* Director
CHARLES H. HARFF* Director
HAROLD A. POLING* Director
MARTIN D. WALKER* Director
THOMAS A. MADDEN* Senior Vice President and Chief Financial
Officer (principal financial officer)
LAWRENCE J. LOCKWOOD* Vice President and Controller
(principal accounting officer)
</TABLE>
* By /s/ DAVID W. GREENFIELD
---------------------------------
(DAVID W. GREENFIELD,
ATTORNEY-IN-FACT)
II-4
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THE PLAN. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
PLAN HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF TROY, STATE OF
MICHIGAN ON THE 11TH DAY OF SEPTEMBER, 1997.
MERITOR AUTOMOTIVE, INC. SAVINGS PLAN
By /s/ RICHARD D. GREB
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(RICHARD D. GREB, PLAN ADMINISTRATOR)
II-5
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CONSENT OF COUNSEL
We hereby consent to the reference to this firm and to the inclusion of the
summary of our opinion under the caption "Tax Consequences" in the Prospectus
related to this Registration Statement on Form S-8 filed by Meritor Automotive,
Inc. in respect of the Meritor Automotive, Inc. Savings Plan.
CHADBOURNE & PARKE LLP
30 Rockefeller Plaza
New York, New York 10112
September 11, 1997
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CONSENT OF COUNSEL
I hereby consent to the incorporation by reference in this Registration
Statement on Form S-8, in respect of the Meritor Automotive, Inc. Savings Plan,
of the reference to me under the heading "The Automotive Business-Legal
Proceedings" in Part I of the Registration Statement on Form 10, as amended,
filed by Meritor Automotive, Inc. (File No. 1-13093).
/s/ JAMES P. O'SHAUGHNESSY
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James P. O'Shaughnessy
September 11, 1997
II-6
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Meritor Automotive, Inc. on Form S-8, in respect to the Meritor Automotive, Inc.
Savings Plan, of our reports dated June 10, 1997 on the combined financial
statements and financial statement schedule of the Automotive Business of
Rockwell International Corporation, and our report dated June 10, 1997 on the
balance sheet of Meritor Automotive, Inc. (formerly 111 Holdings, Inc.), all
appearing in the Registration Statement on Form 10/A, Amendment No. 4, of
Meritor Automotive, Inc. and to the reference to us under the heading "Experts"
in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
September 10, 1997
II-7
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EXHIBIT INDEX
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EXHIBIT
NUMBER PAGE
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4.1 Restated Certificate of Incorporation of the Company.
4.2 Amended By-laws of the Company.
4.3 Rights Agreement, dated as of September 8, 1997, by and between the
Company and First Chicago Trust Company of New York as Rights Agent.
5.1 Opinion of David W. Greenfield, Esq., Senior Vice President, General
Counsel and Secretary of the Company, as to the legality of any
newly-issued Common Stock of the Company covered by this Registration
Statement.
5.2 In lieu of an opinion concerning compliance with the requirements of the
Employee Retirement Income Security Act of 1974, as amended, or a
determination letter of the Internal Revenue Service (the IRS) that the
Plan is qualified under Section 401 of the Internal Revenue Code, the
Company hereby undertakes to submit the Plan and any amendment thereto to
the IRS in a timely manner and to make all changes required by the IRS in
order to qualify the Plan.
23.1 Consent of David W. Greenfield, Esq., Senior Vice President, General
Counsel and Secretary of the Company, contained in his opinion filed as
Exhibit 5.1 to this Registration Statement.
23.2 Consent of Chadbourne & Parke LLP, set forth on page II-6 of this
Registration Statement.
23.3 Consent of James P. O'Shaughnessy, Esq., set forth on page II-6 of this
Registration Statement.
23.4 Consent of Deloitte & Touche LLP, independent auditors, set forth on page
II-7 of this Registration Statement.
24 Power of Attorney authorizing certain persons to sign this Registration
Statement and amendments thereto on behalf of certain directors and
officers of the Company.
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<PAGE> 1
Exhibit 4.1
RESTATED CERTIFICATE OF INCORPORATION
OF
MERITOR AUTOMOTIVE, INC.
FIRST: The name of the Corporation is
Meritor Automotive, Inc.
SECOND: The Corporation's registered office in the State of Delaware is located
at 1209 Orange Street, in the City of Wilmington, County of New Castle. The
name and address of its registered agent is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
THIRD: The nature of the business, or objects or purposes to be transacted,
promoted or carried on, are: To engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 375,000,000, of which
25,000,000 shares without par value are to be of a class designated Preferred
Stock and 350,000,000 shares of the par value of $1 each are to be of a class
designated Common Stock.
In this Article Fourth, any reference to a section or paragraph, without
further attribution, within a provision relating to a particular class of stock
is intended to refer solely to the specified section or paragraph of the other
provisions relating to the same class of stock.
COMMON STOCK
The Common Stock shall have the following voting powers, designations,
preferences and relative, participating, optional and other special
rights, and qualifications, limitations or restrictions thereof:
<PAGE> 2
1. Dividends. Whenever the full dividends upon any outstanding
Preferred Stock for all past dividend periods shall have been paid and
the full dividends thereon for the then current respective dividend
periods shall have been paid, or declared and a sum sufficient for the
respective payments thereof set apart, the holders of shares of the
Common Stock shall be entitled to receive such dividends and
distributions in equal amounts per share, payable in cash or
otherwise, as may be declared thereon by the Board of Directors from
time to time out of assets or funds of the Corporation legally
available therefor.
2. Rights on Liquidation. In the event of any liquidation, dissolution
or winding-up of the Corporation, whether voluntary or involuntary,
after the payment or setting apart for payment to the holders of any
outstanding Preferred Stock of the full preferential amounts to which
such holders are entitled as herein provided or referred to, all of
the remaining assets of the Corporation shall belong to and be
distributable in equal amounts per share to the holders of the Common
Stock. For purposes of this paragraph 2, a consolidation or merger of
the Corporation with any other corporation, or the sale, transfer or
lease of all or substantially all its assets shall not constitute or
be deemed a liquidation, dissolution or winding-up of the Corporation.
3. Voting. Except as otherwise provided by the laws of the State of
Delaware or by this Article Fourth, each share of Common Stock shall
entitle the holder thereof to one vote.
PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized to provide for the
issuance of shares of Preferred Stock in series and, by filing a
certificate pursuant to the applicable law of the State of Delaware
(hereinafter referred to as a "Preferred Stock Designation"), to
establish from time to time the number of shares to be included in
each such series, and to fix the designation, powers, preferences and
rights of the shares of each
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such series and the qualifications, limitations and restrictions
thereof. The authority of the Board of Directors with respect to each
series shall include, but not be limited to, determination of the
following:
(a) the designation of the series, which may be by
distinguishing number, letter or title;
(b) the number of shares of the series, which number the
Board of Directors may thereafter (except where otherwise
provided in the Preferred Stock Designation) increase or
decrease (but not below the number of shares thereof then
outstanding);
(c) whether dividends, if any, shall be cumulative or
noncumulative and the dividend rate of the series;
(d) the dates at which dividends, if any, shall be payable;
(e) the redemption rights and price or prices, if any, for
shares of the series;
(f) the terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series;
(g) the amounts payable on shares of the series in the event
of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation;
(h) whether the shares of the series shall be convertible
into shares of any other class or series, or any other
security, of the Corporation or any other corporation, and,
if so, the specification of such other class or series or
such other security, the conversion price or prices or rate
or rates, any adjustments thereof, the date or dates as of
which such shares shall be convertible and all other terms
and conditions upon which such conversion may be made;
3
<PAGE> 4
(i) restrictions on the issuance of shares of the same series
or of any other class or series; and
(j) the voting rights, if any, of the holders of shares of
the series.
Except as may be provided in this Certificate of Incorporation or in a
Preferred Stock Designation, the Common Stock shall have the exclusive
right to vote for the election of directors and for all other
purposes, and holders of Preferred Stock shall not be entitled to
receive notice of any meeting of shareowners at which they are not
entitled to vote. The number of authorized shares of Preferred Stock
may be increased or decreased (but not below the number of shares
thereof then outstanding) by the affirmative vote of the holders of a
majority of the outstanding Common Stock, without a vote of the
holders of the Preferred Stock, or of any series thereof, unless a
vote of any such holders is required pursuant to any Preferred Stock
Designation.
The Corporation shall be entitled to treat the person in whose name
any share of its stock is registered as the owner thereof for all
purposes and shall not be bound to recognize any equitable or other
claim to, or interest in, such share on the part of any other person,
whether or not the Corporation shall have notice thereof, except as
expressly provided by applicable law.
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
1. Designation and Amount. A series of Preferred Stock, without par
value, is hereby created and shall be designated as "Series A Junior
Participating Preferred Stock" (the "Series A Preferred Stock") and
the number of shares constituting the Series A Preferred Stock shall
be 1,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number
less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options,
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<PAGE> 5
rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into Series A
Preferred Stock.
2. Dividends and Distributions.
2.1. Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior
to the Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of
Common Stock and of any other junior stock of the Corporation, shall
be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the second Monday of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a) $1
or (b) subject to the provision for adjustment hereinafter set forth,
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 since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be
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<PAGE> 6
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.
2.2. The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph 2.1 immediately
after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
2.3. Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date
of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not
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<PAGE> 7
more than 60 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
3.1. Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
shareowners of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
3.2. Except as otherwise provided herein, in any other Preferred Stock
Designation creating a series of Preferred Stock or any similar stock,
or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of shareowners of the
Corporation.
3.3. Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
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<PAGE> 8
4. Certain Restrictions.
4.1. Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in paragraph 2 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(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 Series A 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 Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(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 Series A
Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(d) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of
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Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
4.2. The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
subparagraph (c) of paragraph 4.1, purchase or otherwise acquire such
shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a
new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein or in any other Preferred
Stock Designation creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be
made (i) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock shall have received $100 per share, plus
an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall
be entitled to receive 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 shares of
Common Stock, or (ii) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation,
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dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all
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 Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (i) 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.
7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same
time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, 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. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to
the
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exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Preferred Stock shall not be
redeemable.
9. Rank. The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock.
10. Amendment. The Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock, voting together as a single class.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The private property of the shareowners of the Corporation shall not be
subject to the payment of corporate debts to any extent whatever.
SEVENTH: Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specified circumstances, the number of
directors of the Corporation shall be fixed from time to time exclusively by
the Board of Directors pursuant to a resolution adopted by a majority of the
whole Board. A director need not be a shareowner. The election of directors of
the Corporation need not be by ballot unless the by-laws so require.
The directors, other than those who may be elected by the holders of any series
of Preferred Stock or any other series or class of stock, as provided herein or
in any Preferred Stock Designation, shall be divided into three classes, as
nearly equal in number as possible. One class of directors shall be initially
elected for a term
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expiring at the annual meeting of shareowners to be held in 1998, another class
shall be initially elected for a term expiring at the annual meeting of
shareowners to be held in 1999, and another class shall be initially elected
for a term expiring at the annual meeting of shareowners to be held in 2000.
Members of each class shall hold office until their successors are duly elected
and qualified. At each annual meeting of the shareowners of the Corporation,
commencing with the 1998 annual meeting, the successors of the class of
directors whose term expires at that meeting shall be elected by a plurality
vote of all votes cast for the election of directors at such meeting to hold
office for a term expiring at the annual meeting of shareowners held in the
third year following the year of their election.
Subject to the rights of the holders of any series of Preferred Stock, and
unless the Board of Directors otherwise determines, newly created directorships
resulting from any increase in the authorized number of directors or any
vacancies on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause may be filled
only by a majority vote of the directors then in office, though less than a
quorum, and directors so chosen shall hold office for a term expiring at the
annual meeting of shareowners at which the term of office of the class to which
they have been elected expires and until such director's successor shall have
been duly elected and qualified. No decrease in the number of authorized
directors constituting the whole Board of Directors shall shorten the term of
any incumbent director.
Subject to the rights of the holders of any series of Preferred Stock or any
other series or class of stock, as provided herein or in any Preferred Stock
Designation, to elect additional directors under specific circumstances, any
director may be removed from office at any time, but only for cause and only by
the affirmative vote of the holders of at least 80 percent of the voting power
of the then outstanding capital stock of the Corporation (the "Capital Stock")
entitled to vote generally in the election of directors (the "Voting Stock"),
voting together as a single class.
No director of the Corporation shall be liable to the Corporation or its
shareowners for monetary damages for
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breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Corporation or its shareowners, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. This paragraph shall not eliminate or limit the
liability of a director for any act or omission occurring prior to the
effective date of its adoption. No repeal or modification of this paragraph,
directly or by adoption of an inconsistent provision of this Certificate of
Incorporation, by the shareowners of the Corporation shall be effective with
respect to any cause of action, suit, claim or other matter that, but for this
paragraph, would accrue or arise prior to such repeal or modification.
EIGHTH: Unless otherwise determined by the Board of Directors, no holder of
stock of the Corporation shall, as such holder, have any right to purchase or
subscribe for any stock of any class which the Corporation may issue or sell,
whether or not exchangeable for any stock of the Corporation of any class or
classes and whether out of unissued shares authorized by the Certificate of
Incorporation of the Corporation as originally filed or by any amendment
thereof or out of shares of stock of the Corporation acquired by it after the
issue thereof.
NINTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its shareowners or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or shareowner thereof, or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the shareowners or class of shareowners of this Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or
class of
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creditors, and/or of the shareowners or class of shareowners of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
shareowners or class of shareowners, of this Corporation, as the case may be,
and also on this Corporation.
TENTH:
1. Amendment of Certificate of Incorporation. From time to time any of the
provisions of the Certificate of Incorporation may be amended, altered or
repealed, and other provisions authorized by the statutes of the State of
Delaware at the time in force may be added or inserted in the manner at the
time prescribed by said statutes, and all rights at any time conferred upon the
shareowners of the Corporation by its Certificate of Incorporation are granted
subject to the provisions of this Article Tenth. Notwithstanding anything
contained in this Certificate of Incorporation to the contrary, the affirmative
vote of the holders of at least 80% of the voting power of the then outstanding
Voting Stock, voting together as a single class, shall be required to amend or
repeal Article Seventh, this Article Tenth or Article Twelfth or adopt any
provision inconsistent with any of the foregoing articles.
2. By-laws. The Board of Directors is expressly authorized to make, alter,
amend and repeal the by-laws of the Corporation, in any manner not inconsistent
with the laws of the State of Delaware or of the Certificate of Incorporation
of the Corporation, subject to the power of the holders of the Capital Stock to
alter or repeal the by-laws made by the Board of Directors; provided, that any
such amendment or repeal by shareowners shall require the affirmative vote of
the holders of at least 80% of the voting power of the then outstanding Voting
Stock, voting together as a single class.
ELEVENTH: The shareowner vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this Article Eleventh.
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1. Higher Vote for Business Combinations. In addition to any
affirmative vote required by law, this Certificate of Incorporation or
the by-laws of the Corporation, and except as otherwise expressly
provided in Section 2 of this Article Eleventh, a Business Combination
shall not be consummated without the affirmative vote of the holders
of at least 80% of the voting power of the then outstanding shares of
the Voting Stock, voting together as a single class. Such affirmative
vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage or separate class vote may be
specified, by law or in any agreement with any national securities
exchange or otherwise.
2. When Higher Vote Is Not Required. The provisions of Section 1 of
this Article Eleventh shall not be applicable to a Business
Combination if the conditions specified in either of the following
paragraphs A or B are met.
A. Approval by Continuing Directors. The Business Combination
shall have been approved by at least two-thirds of the
Continuing Directors (as hereinafter defined), whether such
approval is made prior to or subsequent to the date on which
the Interested Shareowner (as hereinafter defined) became an
Interested Shareowner (the "Determination Date").
B. Price and Procedure Requirements. Each of the seven
conditions specified in the following subparagraphs (i)
through (vii) shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date
of the consummation of the Business Combination (the
"Consummation Date") of any consideration other than
cash to be received per share by holders of Common
Stock in such Business Combination shall be an
amount at least equal to the higher amount
determined under clauses (a) and (b) below (the
requirements of this paragraph B(i) shall be
applicable with
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respect to all shares of Common Stock outstanding,
whether or not the Interested Shareowner has
previously acquired any shares of the Common Stock):
(a) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by or on behalf of the
Interested Shareowner for any shares of Common Stock
acquired beneficially by it (1) within the two-year
period immediately prior to the first public
announcement of the proposal of the Business
Combination (the "Announcement Date") or (2) in the
transaction in which it became an Interested
Shareowner, whichever is higher, plus interest
compounded annually from the Determination Date
through the Consummation Date at the prime rate of
interest of Morgan Guaranty Trust Company of New
York (or of such other major bank headquartered in
New York City selected by at least two-thirds of the
Continuing Directors) from time to time in effect in
New York City, less the aggregate amount of any cash
dividends paid, and the Fair Market Value of any
dividends paid in other than cash, per share of
Common Stock from the Determination Date through the
Consummation Date in an amount up to but not
exceeding the amount of such interest payable per
share of Common Stock; and (b) the Fair Market Value
per share of Common Stock on the Announcement Date
or on the Determination Date, whichever is higher.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the Consummation Date of any
consideration other than cash to be received per
share by holders of shares of any class or series of
outstanding Capital Stock, other than the Common
Stock, in such Business Combination shall be an
amount at least equal to the highest amount
determined under clauses (a), (b) and (c) below (the
requirements of this paragraph B(ii) shall be
applicable with respect to all shares
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of every class or series of outstanding Capital
Stock, other than the Common Stock, whether or not
the Interested Shareowner has previously acquired
any shares of a particular class or series of
Capital Stock):
(a) the highest per share price (including
any brokerage commissions, transfer taxes
and soliciting dealers' fees) paid by or on
behalf of the Interested Shareowner for any
shares of such class or series of Capital
Stock acquired beneficially by it (1)
within the two-year period immediately
prior to the Announcement Date or (2) in
the transaction in which it became an
Interested Shareowner, whichever is higher,
plus interest compounded annually from the
Determination Date through the Consummation
Date at the prime rate of interest of
Morgan Guaranty Trust Company of New York
(or of such other major bank headquartered
in New York City selected by at least
two-thirds of the Continuing Directors)
from time to time in effect in New York
City, less the aggregate amount of any cash
dividends paid, and the Fair Market Value
of any dividends paid in other than cash,
per share of such class or series of
Capital Stock from the Determination Date
through the Consummation Date in an amount
up to but not exceeding the amount of such
interest payable per share of such class or
series of Capital Stock; and
(b) the Fair Market Value per share of such
class or series of Capital Stock on the
Announcement Date or on the Determination
Date, whichever is higher; and
(c) the highest preferential amount per
share to which the holders of shares of
such class or series of
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Capital Stock would be entitled in the
event of any voluntary or involuntary
liquidation, dissolution or winding up of
the affairs of the Corporation, regardless
of whether the Business Combination to be
consummated constitutes such an event.
(iii) The consideration to be received by holders of
a particular class or series of outstanding Capital
Stock (including Common Stock) shall be in cash or
in the same form as previously has been paid by or
on behalf of the Interested Shareowner in its direct
or indirect acquisition of beneficial ownership of
shares of such class or series of Capital Stock. If
the consideration so paid for shares of any class or
series of Capital Stock varied as to form, the form
of consideration for such class or series of Capital
Stock shall be either cash or the form used to
acquire beneficial ownership of the largest number
of shares of such class or series of Capital Stock
previously acquired by the Interested Shareowner.
(iv) After such Interested Shareowner has become an
Interested Shareowner and prior to the consummation
of such Business Combination, such Interested
Shareowner shall not have become the beneficial
owner of any additional shares of Capital Stock
except as part of the transaction that results in
such Interested Shareowner becoming an Interested
Shareowner and except in a transaction that, after
giving effect thereto, would not result in any
increase in the Interested Shareowner's percentage
beneficial ownership of any class or series of
Capital Stock; and, except as approved by at least
two-thirds of the Continuing Directors: (a) there
shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends
(whether or not cumulative) payable in accordance
with the
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terms of any outstanding Capital Stock; (b) there
shall have been no reduction in the annual rate of
dividends paid on the Common Stock (except as
necessary to reflect any stock split, stock dividend
or subdivision of the Common Stock); and (c) there
shall have been an increase in the annual rate of
dividends paid on the Common Stock as necessary to
reflect any reclassification (including any reverse
stock split), recapitalization, reorganization or
any similar transaction which has the effect of
reducing the number of outstanding shares of Common
Stock.
(v) After such Interested Shareowner has become an
Interested Shareowner, such Interested Shareowner
shall not have received the benefit, directly or
indirectly (except proportionately as a shareowner
of the Corporation), of any loans, advances,
guarantees, pledges or other financial assistance or
any tax credits or other tax advantages provided by
the Corporation, whether in anticipation of or in
connection with such Business Combination or
otherwise.
(vi) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934
and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to all shareowners of
the Corporation at least 30 days prior to the
consummation of such Business Combination (whether
or not such proxy or information statement is
required to be mailed pursuant to such Act or
subsequent provisions). The proxy or information
statement shall contain on the first page thereof,
in a prominent place, any statement as to the
advisability of the Business Combination that the
Continuing Directors, or any of them, may choose to
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make and, if deemed advisable by at least two-thirds
of the Continuing Directors, the opinion of an
investment banking firm selected for and on behalf
of the Corporation by at least two-thirds of the
Continuing Directors as to the fairness of the terms
of the Business Combination from a financial point
of view to the holders of the outstanding shares of
Capital Stock other than the Interested Shareowner
and its Affiliates or Associates (as hereinafter
defined).
(vii) Such Interested Shareowner shall not have made
any material change in the Corporation's business or
equity capital structure without the approval of at
least two-thirds of the Continuing Directors.
Any Business Combination to which Section 1 of this Article
Eleventh shall not apply by reason of this Section 2 shall
require only such affirmative vote as is required by law, any
other provision of this Certificate of Incorporation, the
by-laws of the Corporation or any agreement with any national
securities exchange.
3. Certain Definitions. For the purposes of this Article Eleventh:
A. A "Business Combination" shall mean:
(i) any merger or consolidation of the Corporation
or any Subsidiary (as hereinafter defined) with (i)
any Interested Shareowner or (ii) any other
corporation (whether or not itself an Interested
Shareowner) which is, or after such merger or
consolidation would be, an Affiliate or Associate of
an Interested Shareowner; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or
a series of transactions) to or with any Interested
Shareowner or any Affiliate or Associate
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of any Interested Shareowner involving any assets or
securities of the Corporation, any Subsidiary or any
Interested Shareowner or any Affiliate or Associate
of any Interested Shareowner having an aggregate
Fair Market Value of $25,000,000 or more; or
(iii) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation
proposed by or on behalf of an Interested Shareowner
or any Affiliate or Associate of any Interested
Shareowner; or
(iv) any reclassification of securities (including
any reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any
other transaction (whether or not with or into or
otherwise involving an Interested Shareowner) that
has the effect, directly or indirectly, of
increasing the proportionate share of any class or
series of Capital Stock, or any securities
convertible into Capital Stock or into equity
securities of any Subsidiary, that is beneficially
owned by any Interested Shareowner or any Affiliate
or Associate of any Interested Shareowner; or
(v) any agreement, contract, arrangement or other
understanding providing for any one or more of the
actions specified in clauses (i) through (iv) above.
B. A "person" shall mean any individual, firm, corporation or other
entity and shall include any group composed of any person and any
other person with whom such person or any Affiliate or Associate of
such person has any agreement, arrangement or understanding, directly
or indirectly, for the purpose of acquiring, holding, voting or
disposing of Capital Stock.
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C. "Interested Shareowner" shall mean any person (other than the
Corporation or any Subsidiary and other than any profit-sharing,
employee stock ownership or other employee benefit plan of the
Corporation, any Subsidiary or Rockwell International Corporation or
any trustee of or fiduciary with respect to any such plan when acting
in such capacity) who or which:
(i) is the beneficial owner of Voting Stock having
10% or more of the votes entitled to be cast by the
holders of all then outstanding shares of Voting
Stock; or
(ii) is an Affiliate or Associate of the Corporation
and at any time within the two-year period
immediately prior to the date in question was the
beneficial owner of Voting Stock having 10% or more
of the votes entitled to be cast by the holders of
all then outstanding shares of Voting Stock; or
(iii) is an assignee of or has otherwise succeeded
to any shares of Voting Stock which were at any time
within the two-year period immediately prior to the
date in question beneficially owned by any
Interested Shareowner, if such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving
a public offering within the meaning of the
Securities Act of 1933;
provided, however, that Rockwell International Corporation shall not
be an Interested Shareowner as a result of its ownership of Capital
Stock of the Corporation prior to the distribution of the shares of
Capital Stock of the Corporation to the holders of capital stock of
Rockwell International Corporation (the "Distribution").
D. A person shall be a "beneficial owner" of any Capital Stock:
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(i) which such person or any Affiliate or Associate
of such person beneficially owns, directly or
indirectly; or
(ii) which such person or any Affiliate or Associate
of such person has, directly or indirectly, (a) the
right to acquire (whether such right is exercisable
immediately or only after the passage of time),
pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or
indirectly, by any other person with which such
person or any Affiliate or Associate of such person
has any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or
disposing of any shares of Capital Stock.
E. For the purposes of determining whether a person is an Interested
Shareowner pursuant to paragraph C of this Section 3, the number of
shares of Capital Stock deemed to be outstanding shall include shares
deemed owned by the Interested Shareowner through application of
paragraph D of this Section 3 but shall not include any other shares
of Capital Stock that may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
F. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on
September 5, 1997 (the term "registrant" in such Rule 12b-2 meaning in
this case the Corporation).
G. "Subsidiary" means any corporation of which a majority of any class
of equity security is beneficially owned by the Corporation; provided,
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however, that for the purposes of the definition of Interested
Shareowner set forth in paragraph C of this Section 3, the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is beneficially owned by the Corporation.
H. "Continuing Director" means any member of the Board of Directors of
the Corporation (the "Board") who is not an Affiliate or Associate or
representative of the Interested Shareowner and was a member of the
Board prior to the time that the Interested Shareowner became an
Interested Shareowner, and any successor of a Continuing Director who
is not an Affiliate or Associate or representative of the Interested
Shareowner and is recommended or elected to succeed a Continuing
Director by at least two-thirds of the Continuing Directors then
members of the Board.
I. "Fair Market Value" means: (i) in the case of cash, the amount of
such cash; (ii) in the case of stock, the highest closing sale price
during the 30-day period immediately preceding the date in question of
a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock is
not listed on such Exchange, on the principal United States securities
exchange registered under the Securities Exchange Act of 1934 on which
such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a share of
such stock during the 30-day period immediately preceding the date in
question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no such
quotations are available, the fair market value on the date in
question of a share of such stock as determined in good faith by at
least two-thirds of the Continuing Directors; and (iii) in the case of
property other than cash or stock, the fair market value of such
property on the date in question as determined in good faith by at
least two-thirds of the Continuing Directors.
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J. In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as
used in paragraphs B(i) and (ii) of Section 2 of this Article Eleventh
shall include the shares of Common Stock and/or the shares of any
other class or series of Capital Stock retained by the holders of such
shares.
4. Powers of Continuing Directors. Any determination as to compliance
with this Article Eleventh, including without limitation (A) whether a
person is an Interested Shareowner, (B) the number of shares of
Capital Stock or other securities beneficially owned by any person,
(C) whether a person is an Affiliate or Associate of another, (D)
whether the requirements of paragraph B of Section 2 have been met
with respect to any Business Combination, and (E) whether the assets
that are the subject of any Business Combination have, or the
consideration to be received for the issuance or transfer of
securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $25,000,000 or more
shall be made only upon action by not less than two-thirds of the
Continuing Directors of the Corporation; and the good faith
determination of at least two-thirds of the Continuing Directors on
such matters shall be conclusive and binding for all the purposes of
this Article Eleventh.
5. No Effect on Fiduciary Obligations. Nothing contained in this
Article Eleventh shall be construed to relieve the Board of Directors
or any Interested Shareowner from any fiduciary obligation imposed by
law.
6. Amendment, Repeal, etc. Notwithstanding any other provisions of
this Certificate of Incorporation or the by-laws of the Corporation
(and notwithstanding the fact that a lesser percentage or separate
class vote may be specified by law, this Certificate of Incorporation
or the by-laws of the Corporation), the affirmative vote of the
holders of at least 80% of the voting power of the then outstanding
shares of Voting Stock, voting together as a single class, shall be
required to amend or repeal, or adopt any provisions inconsistent
with,
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this Article Eleventh; provided, however, that the preceding
provisions of this Section 6 shall not apply to any amendment to this
Article Eleventh, and such amendment shall require only such
affirmative vote as is required by law and any other provisions of
this Certificate of Incorporation or the by-laws of the Corporation,
if such amendment shall have been approved by at least two-thirds of
the members of the Board who are persons who would be eligible to
serve as Continuing Directors.
TWELFTH: From and after the time of the Distribution, any action required or
permitted to be taken by the shareowners shall be taken only at an annual or
special meeting of such shareowners and not by consent in writing. Special
meetings of the shareowners for any purpose or purposes shall be called only by
the Board of Directors pursuant to a resolution adopted by a majority of the
whole Board.
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Exhibit 4.2
BY-LAWS
OF
MERITOR AUTOMOTIVE, INC.
ARTICLE I.
OFFICES
SECTION 1. REGISTERED OFFICE IN DELAWARE; RESIDENT AGENT. The
address of the Corporation's registered office in the State of Delaware and the
name and address of its resident agent in charge thereof are as filed with the
Secretary of State of the State of Delaware.
SECTION 2. OTHER OFFICES. The Corporation may also have an
office or offices at such other place or places either within or without the
State of Delaware as the Board of Directors may from time to time determine or
the business of the Corporation requires.
ARTICLE II.
MEETINGS OF SHAREOWNERS
SECTION 1. PLACE OF MEETINGS. All meetings of the shareowners
of the Corporation shall be held at such place, within or without the State of
Delaware, as may from time to time be designated by resolution passed by the
Board of Directors.
SECTION 2. ANNUAL MEETING. An annual meeting of the
shareowners for the election of directors and for the transaction of such other
proper business, notice of which was given in the notice of meeting, shall be
held on a date and at a time as may from time to time be designated by
resolution passed by the Board of Directors.
SECTION 3. SPECIAL MEETINGS. A special meeting of the
shareowners for any purpose or purposes shall be called only by the Board of
Directors pursuant to a resolution adopted by a majority of the whole Board.
SECTION 4. NOTICE OF MEETINGS. Except as otherwise provided
by law, written notice of each meeting of the shareowners, whether annual or
special, shall be
<PAGE> 2
mailed, postage prepaid, not less than ten nor more than sixty days before the
date of the meeting, to each shareowner entitled to vote at such meeting, at
the shareowner's address as it appears on the records of the Corporation. Every
such notice shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Notice of any adjourned meeting of the shareowners shall not be
required to be given, except when expressly required by law.
SECTION 5. LIST OF SHAREOWNERS. The Secretary shall, from
information obtained from the transfer agent, prepare and make, at least ten
days before every meeting of shareowners, a complete list of the shareowners
entitled to vote at the meeting, arranged in alphabetical order, and showing
the address of each shareowner and the number of shares registered in the name
of each shareowner. Such list shall be open to the examination of any
shareowner, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any shareowner who is present. The stock ledger shall be the only
evidence as to who are the shareowners entitled to examine the stock ledger,
the list referred to in this section or the books of the Corporation, or to
vote in person or by proxy at any meeting of shareowners.
SECTION 6. QUORUM. At each meeting of the shareowners, the
holders of a majority of the issued and outstanding stock of the Corporation
present either in person or by proxy shall constitute a quorum for the
transaction of business except where otherwise provided by law or by the
Certificate of Incorporation or by these by-laws for a specified action. Except
as otherwise provided by law, in the absence of a quorum, a majority in
interest of the shareowners of the Corporation present in person or by proxy
and entitled to vote shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until shareowners
holding the requisite amount of stock shall be present or represented. At any
such adjourned meeting
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at which a quorum may be present, any business may be transacted which might
have been transacted at a meeting as originally called, and only those
shareowners entitled to vote at the meeting as originally called shall be
entitled to vote at any adjournment or adjournments thereof. The absence from
any meeting of the number of shareowners required by law or by the Certificate
of Incorporation or by these by-laws for action upon any given matter shall not
prevent action at such meeting upon any other matter or matters which may
properly come before the meeting, if the number of shareowners required in
respect of such other matter or matters shall be present.
SECTION 7. ORGANIZATION. At every meeting of the shareowners
the Chairman of the Board, or in the absence of the Chairman of the Board, a
director or an officer of the Corporation designated by the Board shall act as
Chairman. The Secretary, or, in his absence, an Assistant Secretary, shall act
as Secretary at all meetings of the shareowners. In the absence from any such
meeting of the Secretary and the Assistant Secretaries, the Chairman may
appoint any person to act as Secretary of the meeting.
SECTION 8. NOTICE OF SHAREOWNER BUSINESS AND NOMINATIONS.
(A) Annual Meetings of Shareowners. (1) Nominations of
persons for election to the Board of Directors of the Corporation and the
proposal of business to be considered by the shareowners may be made at an
annual meeting of shareowners (a) pursuant to the Corporation's notice of
meeting, (b) by or at the direction of the Board of Directors or (c) by any
shareowner of the Corporation who was a shareowner of record at the time of
giving of notice provided for in this by-law, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in this by-law.
(2) For nominations or other business to be properly
brought before an annual meeting by a shareowner pursuant to clause (c) of
paragraph (A)(1) of this by-law, the shareowner must have given timely notice
thereof in writing to the Secretary of the Corporation and such other business
must otherwise be a proper matter for shareowner action. To be timely, a
shareowner's
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<PAGE> 4
notice shall be delivered to the Secretary at the principal executive offices
of the Corporation not later than the close of business on the 60th day nor
earlier than the close of business on the 90th day prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the case of the annual meeting to be held in 1998 or in the event that the date
of the annual meeting is more than 30 days before or more than 60 days after
such anniversary date, notice by the shareowner to be timely must be so
delivered not earlier than the close of business on the 90th day prior to such
annual meeting and not later than the close of business on the later of the
60th day prior to such annual meeting or the 10th day following the day on
which public announcement of the date of such meeting is first made by the
Corporation. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a shareowner's
notice as described above. Such shareowner's notice shall set forth (a) as to
each person whom the shareowner proposes to nominate for election or reelection
as a director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
Rule 14a-11 thereunder (including such person's written consent to being named
in the proxy statement as a nominee and to serving as a director if elected);
(b) as to any other business that the shareowner proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such shareowner and the beneficial owner,
if any, on whose behalf the proposal is made; and (c) as to the shareowner
giving the notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made (i) the name and address of such shareowner, as
they appear on the Corporation's books, and of such beneficial owner and (ii)
the class and number of shares of the Corporation which are owned beneficially
and of record by such shareowner and such beneficial owner.
Notwithstanding anything in the second sentence of paragraph
(A)(2) of this by-law to the contrary, in the event that the number of
directors to be elected to
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<PAGE> 5
the Board of Directors of the Corporation is increased and there is no public
announcement by the Corporation naming all of the nominees for director or
specifying the size of the increased Board of Directors at least 70 days prior
to the first anniversary of the preceding year's annual meeting, a shareowner's
notice required by this by-law shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if it shall
be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 10th day following the
day on which such public announcement is first made by the Corporation.
(B) Special Meetings of Shareowners. Only such business shall
be conducted at a special meeting of shareowners as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting. Nominations
of persons for election to the Board of Directors may be made at a special
meeting of shareowners at which directors are to be elected pursuant to the
Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any shareowner of the
Corporation who is a shareowner of record at the time of giving of notice
provided for in this by-law, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this by-law. In the event
the Corporation calls a special meeting of shareowners for the purpose of
electing one or more directors to the Board of Directors, any such shareowner
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Corporation's notice of meeting, if the
shareowner's notice required by paragraph (A)(2) of this by-law shall be
delivered to the Secretary at the principal executive offices of the
Corporation not earlier than the close of business on the 90th day prior to
such special meeting and not later than the close of business on the later of
the 60th day prior to such special meeting or the 10th day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected at such
meeting. In no event shall the public announcement of an adjournment of a
special meeting commence a new time period for the giving of a shareowner's
notice as described above.
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<PAGE> 6
(C) General. (1) Only such persons who are nominated in
accordance with the procedures set forth in this by-law shall be eligible to
serve as directors and only such business shall be conducted at a meeting of
shareowners as shall have been brought before the meeting in accordance with
the procedures set forth in this by-law. Except as otherwise provided by law,
the Certificate of Incorporation or these by-laws, the Chairman of the meeting
shall have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this by-law and, if any
proposed nomination or business is not in compliance with this by-law, to
declare that such defective proposal or nomination shall be disregarded.
(2) For purposes of this by-law, "public
announcement" shall mean disclosure in a press release reported by the Dow
Jones News Service, Associated Press or comparable national news service or in
a document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this
by-law, a shareowner shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this by-law. Nothing in this by-law shall be deemed to
affect any rights (i) of shareowners to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.
SECTION 9. BUSINESS AND ORDER OF BUSINESS. At each meeting of
the shareowners such business may be transacted as may properly be brought
before such meeting, except as otherwise provided by law or in these by-laws.
The order of business at all meetings of the shareowners shall be as determined
by the Chairman, unless otherwise determined by a majority in interest of the
shareowners present in person or by proxy at such meeting and entitled to vote
thereat.
SECTION 10. VOTING. Except as otherwise provided by law, the
Certificate of Incorporation or
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<PAGE> 7
these by-laws, each shareowner shall at every meeting of the shareowners be
entitled to one vote for each share of stock held by such shareowner. Any vote
on stock may be given by the shareowner entitled thereto in person or by proxy
appointed by an instrument in writing, subscribed (or transmitted by electronic
means and authenticated as provided by law) by such shareowner or by the
shareowner's attorney thereunto authorized, and delivered to the Secretary;
provided, however, that no proxy shall be voted after three years from its date
unless the proxy provides for a longer period. Except as otherwise provided by
law, the Certificate of Incorporation or these by-laws, at all meetings of the
shareowners, all matters shall be decided by the vote (which need not be by
ballot) of a majority in interest of the shareowners present in person or by
proxy and entitled to vote thereat, a quorum being present.
ARTICLE III.
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The property, affairs and business
of the Corporation shall be managed by or under the direction of its Board of
Directors.
SECTION 2. NUMBER, QUALIFICATIONS, AND TERM OF OFFICE.
Subject to the rights of the holders of any series of Preferred Stock to elect
additional directors under specified circumstances, the number of directors of
the Corporation shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the whole Board. A
director need not be a shareowner.
The directors, other than those who may be elected by the holders of any series
of Preferred Stock or any other series or class of stock, as provided herein or
in any Preferred Stock Designation (as defined in the Certificate of
Incorporation), shall be divided into three classes, as nearly equal in number
as possible. One class of directors shall be initially elected for a term
expiring at the annual meeting of shareowners to be held in 1998, another class
shall be initially elected for a term expiring at the annual meeting of
shareowners to be held in 1999, and another class shall be initially elected
for a term expiring at the annual meeting of shareowners to be held in 2000.
Members of each class
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<PAGE> 8
shall hold office until their successors are elected and shall have qualified.
At each annual meeting of the shareowners of the Corporation, commencing with
the 1998 annual meeting, the successors of the class of directors whose term
expires at that meeting shall be elected by a plurality vote of all votes cast
for the election of directors at such meeting to hold office for a term
expiring at the annual meeting of shareowners held in the third year following
the year of their election.
SECTION 3. ELECTION OF DIRECTORS. At each meeting of the
shareowners for the election of directors, at which a quorum is present, the
directors shall be elected by a plurality vote of all votes cast for the
election of directors at such meeting.
SECTION 4. QUORUM AND MANNER OF ACTING. A majority of the
members of the Board of Directors shall constitute a quorum for the transaction
of business at any meeting, and the act of a majority of the directors present
at any meeting at which a quorum is present shall be the act of the Board of
Directors unless otherwise provided by law, the Certificate of Incorporation or
these by-laws. In the absence of a quorum, a majority of the directors present
may adjourn any meeting from time to time until a quorum shall be obtained.
Notice of any adjourned meeting need not be given. The directors shall act only
as a board and the individual directors shall have no power as such.
SECTION 5. PLACE OF MEETINGS. The Board of Directors may hold
its meetings at such place or places within or without the State of Delaware as
the Board may from time to time determine or as shall be specified or fixed in
the respective notices or waivers of notice thereof.
SECTION 6. FIRST MEETING. Promptly after each annual election
of directors, the Board of Directors shall meet for the purpose of
organization, the election of officers and the transaction of other business,
at the same place as that at which the annual meeting of shareowners was held
or as otherwise determined by the Board. Notice of such meeting need not be
given. Such meeting may be held at any other time or place which shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors.
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<PAGE> 9
SECTION 7. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such places and at such times as the Board shall
from time to time determine. If any day fixed for a regular meeting shall be a
legal holiday at the place where the meeting is to be held, then the meeting
which would otherwise be held on that day shall be held at the same hour on the
next succeeding business day not a legal holiday. Notice of regular meetings
need not be given.
SECTION 8. SPECIAL MEETINGS; NOTICE. Special meetings of the
Board of Directors shall be held whenever called by the Chairman of the Board
and shall be called by the Chairman of the Board or the Secretary at the
written request of three directors. Notice of each such meeting stating the
time and place of the meeting shall be given to each director by mail,
telephone, other electronic transmission or personally. If by mail, such notice
shall be given not less than five days before the meeting; and if by telephone,
other electronic transmission or personally, not less than two days before the
meeting. A notice mailed at least two weeks before the meeting need not state
the purpose thereof except as otherwise provided in these by-laws. In all other
cases the notice shall state the principal purpose or purposes of the meeting.
Notice of any meeting of the Board need not be given to a director, however, if
waived by the director in writing before or after such meeting or if the
director shall be present at the meeting, except when the director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened.
SECTION 9. ORGANIZATION. At each meeting of the Board of
Directors, the Chairman of the Board, or, in the absence of the Chairman of the
Board, a director or an officer of the Corporation designated by the Board
shall act as Chairman. The Secretary, or, in the Secretary's absence, any
person appointed by the Chairman, shall act as Secretary of the meeting.
SECTION 10. ORDER OF BUSINESS. At all meetings of the Board
of Directors, business shall be transacted in the order determined by the
Board.
SECTION 11. RESIGNATIONS. Any director of the Corporation may
resign at any time by giving written
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<PAGE> 10
notice to the Chairman of the Board or the Secretary of the Corporation. The
resignation of any director shall take effect at the time specified therein,
and unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 12. COMPENSATION. Each director shall be paid such
compensation, if any, as shall be fixed by the Board of Directors.
SECTION 13. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (A)
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent (except in each of the foregoing
situations to the extent any agreement, arrangement or understanding of agency
contains provisions that supersede or abrogate indemnification under this
section) of another corporation or of any partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create
a presumption that the person did not act in good faith and in a manner which
such person reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
(B) The Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment
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in its favor by reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent (except in
each of the foregoing situations to the extent any agreement, arrangement or
understanding of agency contains provisions that supersede or abrogate
indemnification under this section) of another corporation or of any
partnership, joint venture, trust, employee benefit plan or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery of Delaware or such
other court shall deem proper.
(C) To the extent that a director, officer, employee or agent
of the Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (A) and (B), or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred
by or on behalf of such person in connection therewith. If any such person is
not wholly successful in any such action, suit or proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues
or matters therein, the Corporation shall indemnify such person against all
expenses (including attorneys' fees) actually and reasonably incurred by or on
behalf of such person in connection with each claim, issue or matter that is
successfully resolved. For purposes of this subsection and without limitation,
the termination of any claim, issue or matter by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.
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(D) Notwithstanding any other provision of this section, to
the extent any person is a witness in, but not a party to, any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent (except in each of the foregoing
situations to the extent any agreement, arrangement or understanding of agency
contains provisions that supersede or abrogate indemnification under this
section) of another corporation or of any partnership, joint venture, trust,
employee benefit plan or other enterprise, such person shall be indemnified
against all expenses (including attorneys' fees) actually and reasonably
incurred by or on behalf of such person in connection therewith.
(E) Indemnification under subsections (A) and (B) (unless
ordered by a court) shall be made only as authorized in the specific case upon
a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because such person has met the applicable
standard of conduct set forth in subsections (A) and (B). Such determination
shall be made (1) if a Change of Control (as hereinafter defined) shall not
have occurred, (a) by the Board of Directors by a majority vote of the
Disinterested Directors (as hereinafter defined), even though less than a
quorum or (b) if there are no Disinterested Directors or, even if there are
Disinterested Directors, a majority of such Disinterested Directors so directs,
by (i) Independent Counsel (as hereinafter defined) in a written opinion to the
Board of Directors, a copy of which shall be delivered to the claimant, or (ii)
the shareowners of the Corporation; or (2) if a Change of Control shall have
occurred, by Independent Counsel selected by the claimant in a written opinion
to the Board of Directors, a copy of which shall be delivered to the claimant,
unless the claimant shall request that such determination be made by or at the
direction of the Board of Directors, in which case it shall be made in
accordance with clause (1) of this sentence. Any claimant shall be entitled to
be indemnified against the expenses (including attorneys' fees) actually and
reasonably incurred by such claimant in cooperating with the person or entity
making the determination of entitlement to indemnification (irrespective of the
determination as to the claimant's
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entitlement to indemnification) and, to the extent successful, in connection
with any litigation or arbitration with respect to such claim or the
enforcement thereof.
(F) If a Change of Control shall not have occurred, or if a
Change of Control shall have occurred and a director, officer, employee or
agent requests pursuant to clause (2) of the second sentence in subsection (E)
that the determination whether the claimant is entitled to indemnification be
made by or at the direction of the Board of Directors, the claimant shall be
conclusively presumed to have been determined pursuant to subsection (E) to be
entitled to indemnification if (1)(a) within fifteen days after the next
regularly scheduled meeting of the Board of Directors following receipt by the
Corporation of the request therefor, the Board of Directors shall not have
resolved by majority vote of the Disinterested Directors to submit such
determination to (i) Independent Counsel for its determination or (ii) the
shareowners for their determination at the next annual meeting, or any special
meeting that may be held earlier, after such receipt, and (b) within sixty days
after receipt by the Corporation of the request therefor (or within ninety days
after such receipt if the Board of Directors in good faith determines that
additional time is required by it for the determination and, prior to
expiration of such sixty-day period, notifies the claimant thereof), the Board
of Directors shall not have made the determination by a majority vote of the
Disinterested Directors, or (2) after a resolution of the Board of Directors,
timely made pursuant to clause (1)(a)(ii) above, to submit the determination to
the shareowners, the shareowners meeting at which the determination is to be
made shall not have been held on or before the date prescribed (or on or before
a later date, not to exceed sixty days beyond the original date, to which such
meeting may have been postponed or adjourned on good cause by the Board of
Directors acting in good faith); provided, however, that this sentence shall
not apply if the claimant has misstated or failed to state a material fact in
connection with his or her request for indemnification. Such presumed
determination that a claimant is entitled to indemnification shall be deemed to
have been made (I) at the end of the sixty-day or ninety-day period (as the
case may be) referred to in clause (1)(b) of the immediately preceding sentence
or (II) if the Board of
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Directors has resolved on a timely basis to submit the determination to the
shareowners, on the last date within the period prescribed by law for holding
such shareowners meeting (or a postponement or adjournment thereof as permitted
above).
(G) Expenses (including attorneys' fees) incurred in
defending a civil, criminal, administrative or investigative action, suit or
proceeding shall be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding to a director or officer, promptly after
receipt of a request therefor stating in reasonable detail the expenses
incurred, and to an employee or agent as authorized by the Board of Directors;
provided that in each case the Corporation shall have received an undertaking
by or on behalf of the director, officer, employee or agent to repay such
amount if it shall ultimately be determined that such person is not entitled to
be indemnified by the Corporation as authorized in this section.
(H) The Board of Directors shall establish reasonable
procedures for the submission of claims for indemnification pursuant to this
section, determination of the entitlement of any person thereto and review of
any such determination. Such procedures shall be set forth in an appendix to
these by-laws and shall be deemed for all purposes to be a part hereof.
(I) For purposes of this section,
(1) "Change of Control" means a change of control of
the Corporation at any time after the distribution of the shares of capital
stock of the Corporation to the holders of capital stock of Rockwell
International Corporation (the "Distribution") of a nature that would be
required to be reported in a proxy statement pursuant to Section 14(a) of the
Exchange Act or in a Form 8-K pursuant to Section 13 of the Exchange Act (or in
any similar form or schedule under either of those provisions or any successor
provision), whether or not the Corporation is then subject to such reporting
requirement; provided, however, that, without limitation, a Change of Control
shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of
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the Corporation representing 20% or more of the combined voting power of the
Corporation's then outstanding securities without the prior approval of at
least two-thirds of the members of the Board of Directors in office immediately
prior to such person attaining such percentage interest; (ii) the Corporation
is a party to a merger, consolidation, sale of assets or other reorganization,
or a proxy contest, as a consequence of which members of the Board of Directors
in office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors immediately thereafter; or (iii) during any
period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors (including for this purpose any
director whose election became effective prior to or at the time of the
Distribution and any new director whose election or nomination for election by
the Corporation's shareowners was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.
(2) "Disinterested Director" means a director of the
Corporation who is not and was not a party to an action, suit or proceeding in
respect of which indemnification is sought by a director, officer, employee or
agent.
(3) "Independent Counsel" means a law firm, or a
member of a law firm, that (i) is experienced in matters of corporation law;
(ii) neither presently is, nor in the past five years has been, retained to
represent the Corporation, the director, officer, employee or agent claiming
indemnification or any other party to the action, suit or proceeding giving
rise to a claim for indemnification under this section, in any matter material
to the Corporation, the claimant or any such other party; and (iii) would not,
under applicable standards of professional conduct then prevailing, have a
conflict of interest in representing either the Corporation or such director,
officer, employee or agent in an action to determine the Corporation's or such
person's rights under this section.
(J) The indemnification and advancement of expenses herein
provided, or granted pursuant hereto, shall not be deemed exclusive of any
other rights to
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which any of those indemnified or eligible for advancement of expenses may be
entitled under any agreement, vote of shareowners or Disinterested Directors or
otherwise, both as to action in such person's official capacity and as to
action in another capacity while holding such office, and shall continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such person.
Notwithstanding any amendment, alteration or repeal of this section or any of
its provisions, or of any of the procedures established by the Board of
Directors pursuant to subsection (H) hereof, any person who is or was a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation or of any partnership, joint venture, employee benefit plan
or other enterprise shall be entitled to indemnification in accordance with the
provisions hereof and thereof with respect to any action taken or omitted prior
to such amendment, alteration or repeal except to the extent otherwise required
by law.
(K) No indemnification shall be payable pursuant to this
section with respect to any action against the Corporation commenced by an
officer, director, employee or agent unless the Board of Directors shall have
authorized the commencement thereof or unless and to the extent that this
section or the procedures established pursuant to subsection (H) shall
specifically provide for indemnification of expenses relating to the
enforcement of rights under this section and such procedures.
ARTICLE IV.
COMMITTEES
SECTION 1. APPOINTMENT AND POWERS. The Board of Directors
may, by resolution passed by a majority of the whole Board, designate one or
more committees, each committee to consist of two or more directors of the
Corporation, which, to the extent provided in said resolution or in these
by-laws and not inconsistent with Section 141 of the Delaware General
Corporation Law, as amended, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of
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the Corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Directors.
SECTION 2. TERM OF OFFICE AND VACANCIES. Each member of a
committee shall continue in office until a director to succeed him or her shall
have been elected and shall have qualified, or until he or she ceases to be a
director or until he or she shall have resigned or shall have been removed in
the manner hereinafter provided. Any vacancy in a committee shall be filled by
the vote of a majority of the whole Board of Directors at any regular or
special meeting thereof.
SECTION 3. ALTERNATES. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee.
SECTION 4. ORGANIZATION. Unless otherwise provided by the
Board of Directors, each committee shall appoint a chairman. Each committee
shall keep a record of its acts and proceedings and report the same from time
to time to the Board of Directors.
SECTION 5. RESIGNATIONS. Any regular or alternate member of a
committee may resign at any time by giving written notice to the Chairman of
the Board or the Secretary of the Corporation. Such resignation shall take
effect at the time of the receipt of such notice or at any later time specified
therein, and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 6. REMOVAL. Any regular or alternate member of a
committee may be removed with or without cause at any time by resolution passed
by a majority of the whole Board of Directors at any regular or special
meeting.
SECTION 7. MEETINGS. Regular meetings of each committee, of
which no notice shall be necessary, shall be held on such days and at such
places as the chairman of the committee shall determine or as shall be fixed by
a resolution passed by a majority of all the members of such committee. Special
meetings of each committee will
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be called by the Secretary at the request of any two members of such committee,
or in such other manner as may be determined by the committee. Notice of each
special meeting of a committee shall be mailed to each member thereof at least
two days before the meeting or shall be given personally or by telephone or
other electronic transmission at least one day before the meeting. Every such
notice shall state the time and place, but need not state the purposes of the
meeting. No notice of any meeting of a committee shall be required to be given
to any alternate.
SECTION 8. QUORUM AND MANNER OF ACTING. Unless otherwise
provided by resolution of the Board of Directors, a majority of a committee
(including alternates when acting in lieu of regular members of such committee)
shall constitute a quorum for the transaction of business and the act of a
majority of those present at a meeting at which a quorum is present shall be
the act of such committee. The members of each committee shall act only as a
committee and the individual members shall have no power as such.
SECTION 9. COMPENSATION. Each regular or alternate member of
a committee shall be paid such compensation, if any, as shall be fixed by the
Board of Directors.
ARTICLE V.
OFFICERS
SECTION 1. OFFICERS. The officers of the Corporation shall be
a Chairman of the Board of Directors, who shall be chosen from the members of
the Board of Directors, one or more Vice Presidents (one or more of whom may be
Executive Vice Presidents, Senior Vice Presidents or otherwise as may be
designated by the Board), a Secretary and a Treasurer, all of whom shall be
elected by the Board of Directors. Any two or more offices may be held by the
same person. The Board of Directors may also from time to time elect such other
officers as it deems necessary.
SECTION 2. TERM OF OFFICE. Each officer shall hold office
until his or her successor shall have been duly elected and qualified in his or
her stead, or until his or her death or until he or she shall have resigned
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or shall have been removed in the manner hereinafter provided.
SECTION 3. ADDITIONAL OFFICERS; AGENTS. The Chairman of the
Board may from time to time appoint and remove such additional officers and
agents as may be deemed necessary. Such persons shall hold office for such
period, have such authority, and perform such duties as in these by-laws
provided or as the Chairman of the Board may from time to time prescribe. The
Board of Directors or the Chairman of the Board may from time to time authorize
any officer to appoint and remove agents and employees and to prescribe their
powers and duties.
SECTION 4. SALARIES. Unless otherwise provided by resolution
passed by a majority of the whole Board, the salaries of all officers elected
by the Board of Directors shall be fixed by the Board of Directors.
SECTION 5. REMOVAL. Except where otherwise expressly provided
in a contract authorized by the Board of Directors, any officer may be removed,
either with or without cause, by the vote of a majority of the Board at any
regular or special meeting or, except in the case of an officer elected by the
Board, by any superior officer upon whom the power of removal may be conferred
by the Board or by these by-laws.
SECTION 6. RESIGNATIONS. Any officer elected by the Board of
Directors may resign at any time by giving written notice to the Chairman of
the Board or the Secretary. Any other officer may resign at any time by giving
written notice to the Chairman of the Board. Any such resignation shall take
effect at the date of receipt of such notice or at any later time specified
therein, and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 7. VACANCIES. A vacancy in any office because of
death, resignation, removal or otherwise, shall be filled for the unexpired
portion of the term in the manner provided in these by-laws for regular
election or appointment to such office.
SECTION 8. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman
of the Board of Directors shall be chief executive officer of the Corporation
and, subject to the
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control of the Board of Directors, shall have general and overall charge of the
business and affairs of the Corporation and of its officers. He shall keep the
Board of Directors appropriately informed on the business and affairs of the
Corporation. He shall preside at all meetings of the shareowners and of the
Board of Directors and shall enforce the observance of the rules of order for
the meetings of the Board and the shareowners and the by-laws of the
Corporation.
SECTION 9. EXECUTIVE AND SENIOR VICE PRESIDENTS. One or more
Executive or Senior Vice Presidents shall, subject to the control of the
Chairman of the Board, have lead accountability for components or functions of
the Corporation as and to the extent designated by the Chairman of the Board.
Each Executive or Senior Vice President shall keep the Chairman of the Board
appropriately informed on the business and affairs of the designated components
or functions of the Corporation.
SECTION 10. VICE PRESIDENTS. The Vice Presidents shall
perform such duties as may from time to time be assigned to them or any of them
by the Chairman of the Board.
SECTION 11. SECRETARY. The Secretary shall keep or cause to
be kept in books provided for the purpose the minutes of the meetings of the
shareowners, of the Board of Directors and of any committee constituted
pursuant to Article IV of these by-laws. The Secretary shall be custodian of
the corporate seal and see that it is affixed to all documents as required and
attest the same. The Secretary shall perform all duties incident to the office
of Secretary and such other duties as from time to time may be assigned to him
or her.
SECTION 12. ASSISTANT SECRETARIES. At the request of the
Secretary, or in his or her absence or disability, the Assistant Secretary
designated by him or her shall perform all the duties of the Secretary and,
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the Secretary. The Assistant Secretaries shall perform such
other duties as from time to time may be assigned to them.
SECTION 13. TREASURER. The Treasurer shall have charge of and
be responsible for the receipt,
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disbursement and safekeeping of all funds and securities of the Corporation.
The Treasurer shall deposit all such funds in the name of the Corporation in
such banks, trust companies or other depositories as shall be selected in
accordance with the provisions of these by-laws. From time to time and whenever
requested to do so, the Treasurer shall render statements of the condition of
the finances of the Corporation to the Board of Directors. The Treasurer shall
perform all the duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to him or her.
SECTION 14. ASSISTANT TREASURERS. At the request of the
Treasurer, or in his or her absence or disability, the Assistant Treasurer
designated by him or her shall perform all the duties of the Treasurer and,
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the Treasurer. The Assistant Treasurers shall perform such
other duties as from time to time may be assigned to them.
SECTION 15. CERTAIN AGREEMENTS. The Board of Directors shall
have power to authorize or direct the proper officers of the Corporation, on
behalf of the Corporation, to enter into valid and binding agreements in
respect of employment, incentive or deferred compensation, stock options, and
similar or related matters, notwithstanding the fact that a person with whom
the Corporation so contracts may be a member of its Board of Directors. Any
such agreement may validly and lawfully bind the Corporation for a term of more
than one year, in accordance with its terms, notwithstanding the fact that one
of the elements of any such agreement may involve the employment by the
Corporation of an officer, as such, for such term.
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ARTICLE VI.
AUTHORIZATIONS
SECTION 1. CONTRACTS. The Board of Directors, except as in
these by-laws otherwise provided, may authorize any officer, employee or agent
of the Corporation to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
SECTION 2. LOANS. No loan shall be contracted on behalf of
the Corporation and no negotiable paper shall be issued in its name, unless
authorized by the Board of Directors.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the Corporation shall be signed by such officer or
officers, employee or employees, of the Corporation as shall from time to time
be determined in accordance with authorization of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation shall be
deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the Board of Directors may from time
to time designate, or as may be designated by any officer or officers of the
Corporation to whom such power may be delegated by the Board, and for the
purpose of such deposit the officers and employees who have been authorized to
do so in accordance with the determinations of the Board may endorse, assign
and deliver checks, drafts, and other orders for the payment of money which are
payable to the order of the Corporation.
SECTION 5. PROXIES. Except as otherwise provided in these
by-laws or in the Certificate of Incorporation, and unless otherwise provided
by resolution of the Board of Directors, the Chairman of the Board or any other
officer may from time to time appoint an attorney or attorneys or agent or
agents of the Corporation, in the name and on behalf of the Corporation to cast
the votes which the Corporation may be entitled to cast as a shareowner or
otherwise in any other corporation any of whose stock or other securities may
be
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held by the Corporation, at meetings of the holders of the stock or other
securities of such other corporations, or to consent in writing to any action
by such other corporation, and may instruct the person or persons so appointed
as to the manner of casting such vote or giving such consent, and may execute
or cause to be executed in the name and on behalf of the Corporation and under
its corporate seal, or otherwise, all such written proxies or other instruments
as he may deem necessary or proper in the premises.
ARTICLE VII.
SHARES AND THEIR TRANSFER
SECTION 1. SHARES OF STOCK. Certificates for shares of the
stock of the Corporation shall be in such form as shall be approved by the
Board of Directors. They shall be numbered in the order of their issue, by
class and series, and shall be signed by the Chairman of the Board or a Vice
President, and the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary, of the Corporation. If a share certificate is
countersigned (1) by a transfer agent other than the Corporation or its
employee, or (2) by a registrar other than the Corporation or its employee, any
other signature on the certificate may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a share certificate shall have ceased to be such officer,
transfer agent, or registrar before such certificate is issued, it may be
issued by the Corporation with the same effect as if such person were such
officer, transfer agent, or registrar at the date of issue. The Board of
Directors may by resolution or resolutions provide that some or all of any or
all classes or series of the shares of stock of the Corporation shall be
uncertificated shares. Notwithstanding the preceding sentence, every holder of
uncertificated shares, upon request, shall be entitled to receive from the
Corporation a certificate representing the number of shares registered in such
shareowner's name on the books of the Corporation.
SECTION 2. RECORD OWNERSHIP. A record of the name and address
of each holder of the shares of the Corporation, the number of shares held by
such shareowner, the number or numbers of any share certificate or certificates
issued to such shareowner and
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the number of shares represented thereby, and the date of issuance of the
shares held by such shareowner shall be made on the Corporation's books. The
Corporation shall be entitled to treat the holder of record of any share of
stock (including any holder registered in a book-entry or direct registration
system maintained by the Corporation or a transfer agent or a registrar
designated by the Board of Directors) as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, except as required by law.
SECTION 3. TRANSFER OF STOCK. Shares of stock shall be
transferable on the books of the Corporation by the holder of record of such
stock in person or by such person's attorney or other duly constituted
representative, pursuant to applicable law and such rules and regulations as
the Board of Directors shall from time to time prescribe. Any shares
represented by a certificate shall be transferable upon surrender of such
certificate with an assignment endorsed thereon or attached thereto duly
executed and with such guarantee of signature as the Corporation may reasonably
require.
SECTION 4. LOST, STOLEN AND DESTROYED CERTIFICATES. The
Corporation may issue a new certificate of stock or may register uncertificated
shares, if then authorized by the Board of Directors, in the place of any
certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the Corporation may require the owner of the lost, stolen or
destroyed certificate, or such person's legal representative, to give the
Corporation a bond sufficient to indemnify it against any claim that may be
made against it on account of the alleged loss, theft or destruction of any
such certificate, the issuance of such new certificate or the registration of
such uncertificated shares.
SECTION 5. TRANSFER AGENT AND REGISTRAR; REGULATIONS. The
Corporation shall, if and whenever the Board of Directors shall so determine,
maintain one or more transfer offices or agencies, each in charge of a transfer
agent designated by the Board of Directors, where the shares of the stock of
the Corporation shall be directly transferable, and also one or more registry
offices, each in charge of a registrar designated by the
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Board of Directors, where such shares of stock shall be registered, and no
certificate for shares of the stock of the Corporation, in respect of which a
registrar and transfer agent shall have been designated, shall be valid unless
countersigned by such transfer agent and registered by such registrar. The
Board of Directors may also make such additional rules and regulations as it
may deem expedient concerning the issue, transfer and registration of shares of
stock of the Corporation and concerning the registration of pledges of
uncertificated shares.
SECTION 6. FIXING RECORD DATE. For the purpose of determining
the shareowners entitled to notice of or to vote at any meeting of shareowners
or any adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty nor less than ten days before
the date of such meeting, nor more than sixty days prior to any other action.
If no record date is fixed (1) the record date for determining shareowners
entitled to notice of or to vote at a meeting of shareowners shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held and (2) the record date for determining
shareowners for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto. A
determination of shareowners of record entitled to notice of or to vote at a
meeting of shareowners shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the
adjourned meeting.
SECTION 7. EXAMINATION OF BOOKS BY SHAREOWNERS. The Board of
Directors shall, subject to the laws of the State of Delaware, have power to
determine from time to time, whether and to what extent and under what
conditions and regulations the accounts and books of the Corporation, or any of
them, shall be open to the inspection of the shareowners; and no shareowner
shall have any right to inspect any book or document of the Corporation, except
as conferred by the
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laws of the State of Delaware, unless and until authorized so to do by
resolution of the Board of Directors or of the shareowners of the Corporation.
ARTICLE VIII.
NOTICE
SECTION 1. MANNER OF GIVING WRITTEN NOTICE. Any notice in
writing required by law or by these by-laws to be given to any person may be
delivered personally, may be transmitted by electronic means or may be given by
depositing the same in the post office or letter box in a postpaid envelope
addressed to such person at such address as appears on the books of the
Corporation. Notice by mail shall be deemed to be given at the time when the
same shall be mailed, and notice by other means shall be deemed given when
actually delivered (and in the case of notice transmitted by electronic means,
when authenticated if and as required by law).
SECTION 2. WAIVER OF NOTICE. Whenever any notice is required
to be given to any person, a waiver thereof by such person in writing or
transmitted by electronic means (and authenticated if and as required by law),
whether before or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE IX.
SEAL
The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its organization and the words "Corporate Seal"
and "Delaware".
ARTICLE X.
FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day of October in
each year.
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APPENDIX
PROCEDURES FOR SUBMISSION AND
DETERMINATION OF CLAIMS FOR INDEMNIFICATION
PURSUANT TO ARTICLE III, SECTION 13 OF THE BY-LAWS.
SECTION 1. PURPOSE. The Procedures for Submission and
Determination of Claims for Indemnification Pursuant to Article III, Section 13
of the by-laws (the "Procedures") are to implement the provisions of Article
III, Section 13 of the by-laws of the Corporation (the "by-laws") in compliance
with the requirement of subsection (H) thereof.
SECTION 2. DEFINITIONS. For purposes of these Procedures:
(A) All terms that are defined in Article III, Section 13 of
the by-laws shall have the meanings ascribed to them therein when used in these
Procedures unless otherwise defined herein.
(B) "Expenses" include all reasonable attorneys' fees, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in, a
Proceeding; and shall also include such retainers as counsel may reasonably
require in advance of undertaking the representation of an indemnitee in a
Proceeding.
(C) "Indemnitee" includes any person who was or is, or is
threatened to be made, a witness in or a party to any Proceeding by reason of
the fact that such person is or was a director, officer, employee or agent of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent (except in each of the foregoing
situations to the extent any agreement, arrangement or understanding of agency
contains provisions that supersede or abrogate indemnification under Article
III, Section 13 of the by-laws) of another corporation or of any partnership,
joint venture, trust, employee benefit plan or other enterprise.
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(D) "Proceeding" includes any action, suit, arbitration,
alternative dispute resolution mechanism, investigation, administrative hearing
or any other proceeding, whether civil, criminal, administrative or
investigative, except one initiated by an Indemnitee unless the Board of
Directors shall have authorized the commencement thereof.
SECTION 3. SUBMISSION AND DETERMINATION OF CLAIMS.
(A) To obtain indemnification or advancement of Expenses
under Article III, Section 13 of the by-laws, an Indemnitee shall submit to the
Secretary of the Corporation a written request therefor, including therein or
therewith such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to permit a determination as to whether
and what extent the Indemnitee is entitled to indemnification or advancement of
Expenses, as the case may be. The Secretary shall, promptly upon receipt of a
request for indemnification, advise the Board of Directors thereof in writing
if a determination in accordance with Article III, Section 13(E) of the by-laws
is required.
(B) Upon written request by an Indemnitee for indemnification
pursuant to Section 3(A) hereof, a determination with respect to the
Indemnitee's entitlement thereto in the specific case, if required by the
by-laws, shall be made in accordance with Article III, Section 13(E) of the
by-laws, and, if it is so determined that the Indemnitee is entitled to
indemnification, payment to the Indemnitee shall be made within ten days after
such determination. The Indemnitee shall cooperate with the person, persons or
entity making such determination, with respect to the Indemnitee's entitlement
to indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to the Indemnitee and reasonably necessary to such determination.
(C) If entitlement to indemnification is to be made by
Independent Counsel pursuant to Article III, Section 13(E) of the by-laws, the
Independent Counsel shall be selected as provided in this Section 3(C). If a
Change of Control shall not have occurred, the
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Independent Counsel shall be selected by the Board of Directors, and the
Corporation shall give written notice to the Indemnitee advising the Indemnitee
of the identity of the Independent Counsel so selected. If a Change of Control
shall have occurred, the Independent Counsel shall be selected by the
Indemnitee (unless the Indemnitee shall request that such selection be made by
the Board of Directors, in which event the immediately preceding sentence shall
apply), and the Indemnitee shall give written notice to the Corporation
advising it of the identity of the Independent Counsel so selected. In either
event, the Indemnitee or the Corporation, as the case may be, may, within seven
days after such written notice of selection shall have been given, deliver to
the Corporation or to the Indemnitee, as the case may be, a written objection
to such selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of "Independent
Counsel" as defined in Article III, Section 13 of the by-laws, and the
objection shall set forth with particularity the factual basis of such
assertion. If such written objection is made, the Independent Counsel so
selected may not serve as Independent Counsel unless and until a court has
determined that such objection is without merit. If, within twenty days after
the next regularly scheduled Board of Directors meeting following submission by
the Indemnitee of a written request for indemnification pursuant to Section
3(A) hereof, no Independent Counsel shall have been selected and not objected
to, either the Corporation or the Indemnitee may petition the Court of Chancery
of the State of Delaware or other court of competent jurisdiction for
resolution of any objection which shall have been made by the Corporation or
the Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
an objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Article III, Section 13(E) of the by-laws. The
Corporation shall pay any and all reasonable fees and expenses (including
without limitation any advance retainers reasonably required by counsel) of
Independent Counsel incurred by such Independent Counsel in connection with
acting pursuant to Article III, Section 13(E) of the by-laws, and the
Corporation shall pay all reasonable fees and expenses (including without
limitation any advance retainers
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reasonably required by counsel) incident to the procedures of Article III,
Section 13(E) of the by-laws and this Section 3(C), regardless of the manner in
which Independent Counsel was selected or appointed. Upon the delivery of its
opinion pursuant to Article III, Section 13 of the by-laws or, if earlier, the
due commencement of any judicial proceeding or arbitration pursuant to Section
4(A)(3) of these Procedures, Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
(D) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification under the by-laws,
the person, persons or entity making such determination shall presume that an
Indemnitee is entitled to indemnification under the by-laws if the Indemnitee
has submitted a request for indemnification in accordance with Section 3(A)
hereof, and the Corporation shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption.
SECTION 4. REVIEW AND ENFORCEMENT OF DETERMINATION.
(A) In the event that (1) advancement of Expenses is not
timely made pursuant to Article III, Section 13(G) of the by-laws, (2) payment
of indemnification is not made pursuant to Article III, Section 13(C) or (D) of
the by-laws within ten days after receipt by the Corporation of written request
therefor, (3) a determination is made pursuant to Article III, Section 13(E) of
the by-laws that an Indemnitee is not entitled to indemnification under the
by-laws, (4) the determination of entitlement to indemnification is to be made
by Independent Counsel pursuant to Article III, Section 13(E) of the by-laws
and such determination shall not have been made and delivered in a written
opinion within ninety days after receipt by the Corporation of the written
request for indemnification, or (5) payment of indemnification is not made
within ten days after a determination has been made pursuant to Article III,
Section 13(E) of the by-laws that an Indemnitee is entitled to indemnification
or within ten days after such determination is deemed to have been made
pursuant to
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Article III, Section 13(F) of the by-laws, the Indemnitee shall be entitled to
an adjudication in an appropriate court of the State of Delaware, or in any
other court of competent jurisdiction, of the Indemnitee's entitlement to such
indemnification or advancement of Expenses. Alternatively, the Indemnitee, at
his or her option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association. The
Indemnitee shall commence such proceeding seeking an adjudication or an award
in arbitration within one year following the date on which the Indemnitee first
has the right to commence such proceeding pursuant to this Section 4(A). The
Corporation shall not oppose the Indemnitee's right to seek any such
adjudication or award in arbitration.
(B) In the event that a determination shall have been made
pursuant to Article III, Section 13(E) of the by-laws that an Indemnitee is not
entitled to indemnification, any judicial proceeding or arbitration commenced
pursuant to this Section 4 shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and the Indemnitee shall not be prejudiced
by reason of that adverse determination. If a Change of Control shall have
occurred, the Corporation shall have the burden of proving in any judicial
proceeding or arbitration commenced pursuant to this Section 4 that the
Indemnitee is not entitled to indemnification or advancement of Expenses, as
the case may be.
(C) If a determination shall have been made or deemed to have
been made pursuant to Article III, Section 13(E) or (F) of the by-laws that an
Indemnitee is entitled to indemnification, the Corporation shall be bound by
such determination in any judicial proceeding or arbitration commenced pursuant
to this Section 4, absent (1) a misstatement or omission of a material fact in
connection with the Indemnitee's request for indemnification, or (2) a
prohibition of such indemnification under applicable law.
(D) The Corporation shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 4 that
the procedures and presumptions of these Procedures are not valid, binding and
enforceable, and shall stipulate in any such judicial proceeding or arbitration
that the Corporation is bound by all the provisions of these Procedures.
31
<PAGE> 32
(E) In the event that an Indemnitee, pursuant to this Section
4, seeks to enforce the Indemnitee's rights under, or to recover damages for
breach of, Article III, Section 13 of the by-laws or these Procedures in a
judicial proceeding or arbitration, the Indemnitee shall be entitled to recover
from the Corporation, and shall be indemnified by the Corporation against, any
and all expenses (of the types described in the definition of Expenses in
Section 2 of these Procedures) actually and reasonably incurred in such
judicial proceeding or arbitration, but only if the Indemnitee prevails
therein. If it shall be determined in such judicial proceeding or arbitration
that the Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the expenses incurred by the
Indemnitee in connection with such judicial proceeding or arbitration shall be
appropriately prorated.
SECTION 5. AMENDMENTS. These Procedures may be amended at any
time and from time to time in the same manner as any by-law of the Corporation
in accordance with the Certificate of Incorporation; provided, however, that
notwithstanding any amendment, alteration or repeal of these Procedures or any
provision hereof, any Indemnitee shall be entitled to utilize these Procedures
with respect to any claim for indemnification arising out of any action taken
or omitted prior to such amendment, alteration or repeal except to the extent
otherwise required by law.
32
<PAGE> 1
Exhibit 4.3
- --------------------------------------------------------------------------------
MERITOR AUTOMOTIVE, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK, AS
RIGHTS AGENT
Rights Agreement
Dated as of September 8, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 1. Certain Definitions.........................................................................2
Section 2. Appointment of Rights Agent.................................................................5
Section 3. Issue of Right Certificates.................................................................5
Section 4. Form of Right Certificates..................................................................8
Section 5. Countersignature and Registration...........................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates...........................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..............................10
Section 8. Cancellation and Destruction of Right Certificates.........................................12
Section 9. Availability of Preferred Shares...........................................................12
Section 10. Preferred Shares Record Date...............................................................13
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights.........................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.................................24
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.......................24
Section 14. Fractional Rights and Fractional Shares....................................................25
Section 15. Rights of Action...........................................................................27
Section 16. Agreement of Right Holders.................................................................28
Section 17. Right Holder Not Deemed a Shareowner.......................................................28
Section 18. Concerning the Rights Agent................................................................29
Section 19. Merger or Consolidation or Change of Name of Rights Agent..................................29
Section 20. Duties of Rights Agent.....................................................................30
Section 21. Change of Rights Agent.....................................................................33
Section 22. Issuance of New Right Certificates.........................................................34
Section 23. Redemption.................................................................................34
Section 24. Exchange...................................................................................35
Section 25. Notice of Certain Events...................................................................37
Section 26. Notices....................................................................................38
Section 27. Supplements and Amendments.................................................................40
Section 28. Successors.................................................................................40
Section 29. Benefits of this Agreement.................................................................41
Section 30. Severability...............................................................................41
Section 31. Governing Law..............................................................................41
Section 32. Counterparts...............................................................................41
Section 33. Descriptive Headings.......................................................................41
Signatures .......................................................................... 42
</TABLE>
Exhibit A - Form of Right Certificate
<PAGE> 3
RIGHTS AGREEMENT
Agreement, dated as of September 8, 1997, between Meritor
Automotive, Inc., a Delaware corporation (the "Company"), and First Chicago
Trust Company of New York, a limited-purpose trust company chartered under the
laws of the State of New York (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company to be issued in the
distribution of Common Shares of the Company (the "Spin-Off") by Rockwell
International Corporation, a Delaware corporation ("Rockwell"), to Rockwell's
shareowners, each Right representing the right to purchase one one-hundredth of
a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share of the Company that
shall become outstanding between the effective date of the Spin-Off (the
"Record Date") and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares of the Company then outstanding, but
shall not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan of
Rockwell, the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to
<PAGE> 4
the terms of any such plan. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of an acquisition of
Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 20% or more of the Common Shares of the
Company then outstanding by reason of share purchases by the Company
and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company (other
than an acquisition that does not directly or indirectly increase the
proportionate share of the Common Shares of the Company beneficially
owned by such Person), then such Person shall be deemed to be an
"Acquiring Person". Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person", as defined pursuant to the
foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer
be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.
Notwithstanding the foregoing provisions of this paragraph (a),
Rockwell shall not be deemed to be an Acquiring Person as a result of
its ownership of capital stock of the Company prior to the Spin-Off.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
2
<PAGE> 5
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to have "Beneficial Ownership" of and to "beneficially
own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement
or understanding (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 (other
than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to
any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or
3
<PAGE> 6
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 to the extent contemplated
by the proviso to Section l(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding", when used with reference
to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued
and outstanding which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a Saturday,
a Sunday, or a day on which banking institutions in New York are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
shall mean the shares of Common Stock (as such term is hereinafter
defined). "Common Shares" when used with reference to any Person other
than the Company shall mean the capital stock (or equity interest)
with the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Common Stock" shall mean the Common Stock, par value $1
per share, of the Company.
(h) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
4
<PAGE> 7
(i) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(j) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
(k) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, without par value, of the Company
having the rights and preferences set forth in the Certificate of
Incorporation of the Company.
(l) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(m) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(n) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the registered holders of the Common Shares) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier
of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common
5
<PAGE> 8
Shares for or pursuant to the terms of any such plan) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming
the Beneficial Owner of Common Shares aggregating 20% or more of the then
outstanding Common Shares (the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be attached to (subject to the
provisions of Section 3(b) hereof) the Common Shares (whether in book-entry,
uncertificated or certificated form) issued and outstanding and the Rights will
be owned by the registered holders of the Common Shares and will not be
evidenced by separate Right Certificates, and (y) any transfer of Common Shares
(or any interest therein, including the creation of a security interest) will
also effect a transfer of the associated Rights (or the equivalent interest
therein) and neither the Rights nor any interest therein may be transferred
otherwise than by transfer of the associated Common Shares (or the equivalent
interest therein). As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit A hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held, subject, in
the case of Common Shares held in uncertificated form on the Distribution Date,
to the rights provided by law to a registered pledgee whose security interest
has been duly registered with the Company. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) Until the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date,
6
<PAGE> 9
certificates for Common Shares shall have impressed on, printed on, written on
or otherwise affixed to them substantially the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Meritor
Automotive, Inc. and First Chicago Trust Company of New York, dated as
of September 8, 1997 (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 Meritor Automotive, Inc. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. Meritor Automotive, Inc. will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring Person (as defined in
the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
(c) Until the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date, confirmations and account
statements sent to holders of Common Shares in book-entry form and initial
transaction statements relating to the registration, pledge or release from
pledge of Common Shares in uncertificated form shall have impressed on, printed
on, written on or otherwise affixed to them substantially the following legend:
The shares of the Common Stock, par value $1 per share, of Meritor
Automotive, Inc. to which this statement relates also evidence and
entitle the holder thereof to certain Rights as set forth in a Rights
Agreement between Meritor Automotive, Inc. and First Chicago Trust
Company of New York, dated as of September 8, 1997 (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 Meritor Automotive, Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by the shares to
which this statement relates. Meritor Automotive, Inc. will mail to
the holder of the shares to which this statement relates and any
registered pledgee of uncertificated shares a copy of the Rights
Agreement without charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights Agreement,
Rights issued to any Person who becomes an Acquiring Person (as
defined in the Rights Agreement) may become null and void.
7
<PAGE> 10
With respect to Common Shares in book-entry form for which there has been sent
a confirmation or account statement and Common Shares in uncertificated form
for which there has been sent an initial transaction statement containing the
foregoing legend, until the Distribution Date, the Rights associated with such
Common Shares shall be evidenced by such Common Shares alone, and the
registration of transfer or pledge, or the release from pledge, of any such
Common Shares shall also constitute the registration of transfer or pledge, or
the release from pledge, as the case may be, of the Rights associated with such
Common Shares.
(d) In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. Subject to the
provisions of Section 22 hereof, the Right Certificates (and the forms of
election to purchase Preferred Shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President, any of its Vice Presidents, or its Treasurer, either
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested
8
<PAGE> 11
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
countersigned. In case any officer of the Company who shall have signed any of
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, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as
though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and 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.
Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office, books for registration and
transfer of the Rights issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights, the number of Rights
evidenced on its face by each of the Right Certificates and the date of each of
the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder of the Rights evidenced thereby to purchase a
like number of one one-hundredths of a Preferred Share as the Right Certificate
or Right Certificates
9
<PAGE> 12
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
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 make and
deliver a new Right Certificate of like tenor to the Rights Agent for delivery
to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. (a) Each Right (other than Rights that have become void
pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to
Section 24 hereof) shall initially entitle the registered holder thereof to
purchase one one-hundredth of a Preferred Share, subject to adjustment from
time to time as provided in Section 11 or 13 hereof. The purchase price (the
"Purchase Price") for each one one-hundredth of a Preferred Share purchasable
pursuant to the exercise of a Right shall initially be $112.50, and shall be
subject to adjustment from time to time as provided in Section 11 or 13 hereof
and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
10
<PAGE> 13
(b) The registered holder of any Rights may exercise such
Rights (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate evidencing
such Rights, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on the tenth anniversary of the Record
Date (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable transfer tax required to be paid by the
holder of the Rights evidenced by such Right Certificate in accordance with
Section 9 hereof by certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates for
the number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, or
(B) requisition from the depositary agent depositary receipts representing such
number of one one-hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of
11
<PAGE> 14
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of the Rights evidenced by such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of the Rights evidenced by such Right
Certificate.
(d) In case the registered holder of the Rights evidenced by
any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Rights or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Availability of Preferred Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in
its treasury, the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with Section 7.
The Company covenants and agrees that it will take all such action as may be
12
<PAGE> 15
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights or
the Right Certificates or of any Preferred Shares upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Rights or Right
Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares in a name other
than that of, the registered holder of the Rights evidenced by Right
Certificates surrendered for exercise or to issue or to deliver any
certificates or depositary receipts for Preferred Shares upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Rights at the time of surrender of the related Right
Certificate) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in
whose name any Preferred Shares are issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of such
Preferred Shares on, and the date of issuance of such Preferred Shares and the
date of any certificate for such Preferred Shares shall be, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which
the Preferred Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and the
date of issuance of such Preferred Shares and the date of any such certificate
shall be, the next succeeding Business Day on which the Preferred Shares
transfer books of the
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<PAGE> 16
Company are open. Prior to the exercise of any Rights, the holder thereof shall
not be entitled to any rights of a holder of Preferred Shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred Shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
Record Date (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at a
time when the Preferred Shares transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right.
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<PAGE> 17
(ii) Subject to Section 24 of this Agreement, in the event
any Person becomes an Acquiring Person, each registered holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one one-hundredths
of a Preferred Share for which a Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
shares of Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price of the Company's
Common Stock (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company shall
not take any action which would eliminate or diminish the benefits intended to
be afforded by the Rights.
From and after the occurrence of such event, any Rights that
are or were acquired or beneficially owned by any Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be void and any holder
of such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 that evidences Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof and any Right Certificate evidencing Rights beneficially
owned by any such Acquiring Person shall be void; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence shall be canceled.
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<PAGE> 18
(iii) In the event that there shall not be sufficient shares
of Common Stock issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be necessary
to authorize additional shares of Common Stock for issuance upon exercise of
the Rights. In the event the Company shall, after good faith effort, be unable
to take all such action as may be necessary to authorize such additional shares
of Common Stock, the Company shall substitute, for each share of Common Stock
that would otherwise be issuable upon exercise of a Right, a number of
Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one share of Common Stock as of the date
of issuance of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
then current per share market price of the Preferred Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at
16
<PAGE> 19
such current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such
a record date is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Preferred Shares on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion
of the
17
<PAGE> 20
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price of
the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security; and provided, further, that in the event
that the current per share market price of the shares of Common Stock is
determined as of a date prior to the expiration of 30 Trading Days following
the Record Date, the current per share market price of the Common Stock shall
be deemed to be the average of the daily closing prices per share of Common
Stock for the period of Trading Days commencing with the Record Date and ending
18
<PAGE> 21
immediately prior to such date. 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 Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Stock as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by one hundred. If
neither the shares of Common Stock nor the Preferred Shares are publicly held
19
<PAGE> 22
or so listed or traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right 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 Shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
20
<PAGE> 23
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths of a
Preferred Share purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. 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
21
<PAGE> 24
to registered holders of Rights on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such registered holders 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 to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the registered holders of
the Rights 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 Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the registered holder of any Right exercised after such
record date of the Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the Preferred
Shares and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the
22
<PAGE> 25
Purchase Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares 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
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or
issuance of rights, options or warrants referred to hereinabove in Section
11(b), hereafter made by the Company to holders of its Preferred Shares shall
not be taxable to such shareowners.
(n) In the event that at any time after the Record Date and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
number of one one-hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such event,
and (B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments
23
<PAGE> 26
provided for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each registered holder of a Right in accordance with Section
25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event, directly or indirectly, at any time
after a Person has become an Acquiring Person, (a) the Company shall
consolidate with, or merge with and into, any other Person, (b) any Person
shall consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or one or more of
its wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each registered holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common
24
<PAGE> 27
Shares of such other Person (including the Company as successor thereto or as
the surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price of the Common
Shares of such other Person (determined pursuant to Section 11(d) hereof) on
the date of consummation of such consolidation, merger, sale or transfer; (ii)
the issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such issuer; and (iv)
such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered
25
<PAGE> 28
holders of the Rights with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
26
<PAGE> 29
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided, that such agreement
shall provide that the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as beneficial
owners of the Preferred Shares represented by such depositary receipts. In lieu
of fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company shall pay to the registered
holders of Rights at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Preferred Share. For the purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Rights and any registered holder of any Right, without the consent of the
Rights Agent or of the holder of any other Right, may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights registered in his name in the manner provided
in the Right Certificates 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.
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<PAGE> 30
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 the Common
Shares;
(b) after the Distribution Date, the Rights are transferable
only on the registry books of the Rights Agent upon surrender of the
Right Certificate evidencing such Rights at the principal office of
the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right is registered as the absolute owner
thereof (notwithstanding any notations of ownership or writing on the
Right Certificates evidencing such Rights or any certificate for the
associated Common Shares made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary,
except as required by law.
Section 17. Right Holder Not Deemed a Shareowner. No
holder, as such, of any Right shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
such Rights, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right, as such, any of the rights of
a shareowner of the Company or any right to vote for the election of directors
or upon any matter submitted to shareowners at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareowners (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
such Right or Rights shall have been exercised in accordance with the
provisions hereof.
28
<PAGE> 31
Section 18. Concerning the Rights Agent. The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, instruction, notice,
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, or otherwise upon the advice
of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust powers 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
29
<PAGE> 32
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 hereof. 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 the 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.
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.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights, 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.
30
<PAGE> 33
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall
be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the 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 to Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Section 3, 11, 13,
23 or 24, or the ascertaining of the existence of facts
31
<PAGE> 34
that would require any such change or adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to
whether any Preferred Shares will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President,
any Vice President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those
instructions.
(h) The Rights Agent and any shareowner, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
32
<PAGE> 35
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
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 Shares or Preferred Shares by registered or
certified mail, and to the registered holders of the Rights 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 Shares or
Preferred Shares by registered or certified mail, and to the registered holders
of the Rights 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 registered holder of a Right
(who shall, with such notice, submit his Right Certificate, if any, or his
certificate, if any, for the associated Common Shares 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 corporation, or an affiliate of such a corporation, organized and
doing business under the laws of the United States or of the State of New York
(or of any other state of the United States so long as such
33
<PAGE> 36
corporation is authorized to do business as a banking institution in the State
of New York), in good standing, having an office in the State of New York,
which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Rights. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Right
Certificates to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
upon exercise of a Right made in accordance with the provisions of this
Agreement.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to such time as any Person
becomes an Acquiring Person, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right,
34
<PAGE> 37
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 by the Board of Directors may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption; provided, however,
that the failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights, the Company shall mail a
notice of redemption to all the registered holders of the then outstanding
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for shares of Common Stock at an
exchange ratio of one share of
35
<PAGE> 38
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 of Directors shall not be empowered to
effect such exchange at any time after the Record Date if any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
Rockwell, the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares of Common
Stock equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the registered holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the 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 the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding
36
<PAGE> 39
or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary to authorize such
additional shares of Common Stock, the Company shall substitute, for each share
of Common Stock that would otherwise be issuable upon exchange of a Right, a
number of Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one share of Common Stock as of
the date of issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock, the
Company shall pay to the registered holders of the Rights with regard to which
such fractional shares of Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.
Section 25. Notice of Certain Events. (a) In case at any time
after the Record Date the Company shall propose (i) to pay any dividend payable
in stock of any class to the holders of its Preferred Shares or to make any
other distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other
than a
37
<PAGE> 40
reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each registered holder of a Right, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
each registered holder of a Right, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the
38
<PAGE> 41
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,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Meritor Automotive, Inc.
2135 West Maple Road
Troy, Michigan 48084-7186
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, 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, addressed (until another address is filed in
writing with the Company) as follows:
First Chicago Trust Company of New York
525 Washington Boulevard
Suite 4660
Jersey City, New Jersey 07310
Attention: Tender & Exchanges Administration
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 shall be sufficiently
given or made if sent by
39
<PAGE> 42
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company or the registry books
of the holders of the Rights maintained by the Rights Agent after the
Distribution Date as herein provided. Any notice or demand given prior to the
Distribution Date by the Company or the Rights Agent to the holders of the
Rights shall also be given to any registered pledgee of any uncertificated
Common Share by first-class mail, postage prepaid, addressed to such registered
pledgee at the address of such registered pledgee as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from
time to time supplement or amend this Agreement without the approval of any
holders of Rights in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Without limiting
the foregoing, the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 3(a) to not less than the greater of (i) the sum of
.001% and the largest percentage of the outstanding Common Shares then known by
the Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of Rockwell, the Company
or any Subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan) and (ii) 10%.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
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<PAGE> 43
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than
the Company, the Rights Agent and the registered holders of the Rights any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights.
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
MERITOR AUTOMOTIVE, INC.
Attest:
By _____________________ By ________________________
Title: Title:
FIRST CHICAGO TRUST COMPANY OF NEW YORK, as
rights agent
Attest:
By _____________________ By ________________________
Title: Title:
42
<PAGE> 45
Exhibit A
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER ________, 2007 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT.
Right Certificate
MERITOR AUTOMOTIVE, 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 8, 1997 (the "Rights Agreement"),
between Meritor Automotive, Inc., a Delaware corporation (the "Company"), and
First Chicago Trust Company of New York (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., New York City time, on , 2007 at
the principal office of the Rights Agent, or at the office of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable share of Series
A Junior Participating Preferred Stock, without par value (the "Preferred
Shares"), of the Company, at a purchase price of $112.50 per one one-hundredth
of a Preferred Share (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of __________, 1997, based on the Preferred Shares
as constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Preferred Shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
the Rights evidenced by this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per
A-1
<PAGE> 46
Right or (ii) may be exchanged in whole or in part for Preferred Shares or
shares of the Company's Common Stock, par value $1 per share.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of Rights evidenced by this Right Certificate shall
be entitled to vote or receive dividends or be deemed for any purpose the
holder of the Preferred Shares or of any other securities of the Company which
may at any time be issuable on the exercise thereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder of any Rights evidenced hereby, as such, any of the rights of a
shareowner of the Company or any right to vote for the election of directors or
upon any matter submitted to shareowners at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareowners (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ____________.
ATTEST: MERITOR AUTOMOTIVE, INC.
____________________ By:______________________
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
By:__________________________
Authorized Signature
A-2
<PAGE> 47
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights evidenced by this Right
Certificate.)
FOR VALUE RECEIVED _______________________________ hereby
sells, assigns and transfers unto _________________________________________
(Please print name and address of transferee)
___________ Rights evidenced by this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint __________________ attorney, to transfer the said Rights on the books
of the within-named Company, with full power of substitution.
Dated:________________
---------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States, in each case, participating in a
Medallion program approved by the Securities Transfer Association, Inc.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
---------------------------
Signature
A-3
<PAGE> 48
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
To: Meritor Automotive, Inc.
The undersigned hereby irrevocably elects to exercise
___________________ Rights evidenced by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated: ____________
-----------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States, in each case,
A-4
<PAGE> 49
Form of Reverse Side of Right Certificate -- continued
- --------------------------------------------------------------------------------
participating in a Medallion program approved by the Securities Transfer
Association, Inc.
- -------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
___________________________
Signature
- --------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election
to Purchase, as the case may be, must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
A-5
<PAGE> 1
Exhibit 5.1
September 11, 1997
Meritor Automotive, Inc.
2135 West Maple Road
Troy, Michigan 48084
Re: Meritor Automotive, Inc. Savings Plan
Registration Statement on Form S-8
-------------------------------------
Dear Sirs:
I am Vice President, General Counsel and Secretary of Meritor Automotive, Inc.
("Company"), a Delaware corporation, and I am delivering this opinion in
connection with the Registration Statement on Form S-8 ("Registration
Statement"), to be filed on or about the date hereof, registering under the
Securities Act of 1933, as amended ("Act"), 1,500,000 shares of the Company's
common stock, $1.00 par value (including the associated preferred share
purchase rights) ("Stock"), to be issued from time to time by the Company in
connection with the Meritor Automotive, Inc. Savings Plan ("Plan"), and of
interests in the Plan. I have examined such documents, records and matters of
law as I have deemed necessary as a basis for the opinions hereinafter
expressed.
On the basis of the foregoing, and having due regard for legal considerations
that I deem relevant, I am of the opinion that when the Registration Statement
has become effective under the Act and the Stock has been duly issued and
delivered pursuant to the terms of the Plan, the Stock will be legally issued,
fully paid and non-assessable.
I express no opinion herein as to any laws other than the General Corporation
Law of the State of Delaware and the Federal laws of the United States.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to me under the caption "Legal
Matters" in the prospectus
<PAGE> 2
Meritor Automotive, Inc.
September , 1997
Page 2
constituting a part of the Registration Statement. I also consent to the
incorporation by reference in the Registration Statement of the reference to me
under the heading "The Automotive Business - Legal Proceedings" in Part I of
the Company's Registration Statement on Form 10, as amended, in File No.
1-13093.
Very truly yours,
David W. Greenfield
Senior Vice President,
General Counsel and Secretary
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
I, the undersigned Director and/or Officer of Meritor Automotive,
Inc., a Delaware corporation (the Company), hereby constitute WILLIAM J.
CALISE, JR., EDWARD T. MOEN, II, DAVID W. GREENFIELD, BONNIE WILKINSON,
KATHLEEN CLOVER AND PETER R. KOLYER, and each of them singly, my true and
lawful attorneys with full power to them and each of them to sign for me, and
in my name and in the capacity or capacities indicated below, Registration
Statements on Form S-8 and any and all amendments (including post-effective
amendments) and supplements thereto for the purpose of registering securities
to be sold under the Company's 1997 Long-Term Incentives Plan and the Company's
Savings Plan.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
____________________________ Chairman of the Board and August 25, 1997
Larry D. Yost Chief Executive Officer
(principal executive officer)
and Director
____________________________ Director August 25, 1997
Donald R. Beall
____________________________ Director August 25, 1997
Charles R. Harff
____________________________ Senior Vice President, August 25, 1997
Thomas A. Madden Finance and Chief Financial Officer
(principal financial officer)
</TABLE>
<PAGE> 2
POWER OF ATTORNEY
I, the undersigned Director and/or Officer of Meritor Automotive,
Inc., a Delaware corporation (the Company), hereby constitute WILLIAM J.
CALISE, JR., EDWARD T. MOEN, II, DAVID W. GREENFIELD, BONNIE WILKINSON,
KATHLEEN CLOVER AND PETER R. KOLYER, and each of them singly, my true and
lawful attorneys with full power to them and each of them to sign for me, and
in my name and in the capacity or capacities indicated below, Registration
Statements on Form S-8 and any and all amendments (including post-effective
amendments) and supplements thereto for the purpose of registering securities
to be sold under the Company's 1997 Long-Term Incentives Plan and the Company's
Savings Plan.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
____________________________ Director September 8, 1997
Joseph B. Anderson, Jr.
____________________________ Director September 8, 1997
John J. Creedon
____________________________ Director September 8, 1997
Harold A. Poling
____________________________ Director September 8, 1997
Martin D. Walker
____________________________ Vice President and September 8, 1997
Lawrence J. Lockwood Controller
(principal accounting officer)
</TABLE>
