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UNTIED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CHAMPIONSHIP AUTO RACING TEAMS, INC.
(Exact name of registrant as specified in its charter)
A Delaware Corporation IRS# 38-3389456
(State of incorporation or organization) (I.R.S. Employer Identification No.)
755 West Big Beaver Road, Suite 800, Troy, Michigan 48084
(Address of principal executive offices) (Zip Code)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
EACH CLASS IS TO BE REGISTERED
Common Stock, $.01 par value per share New York Stock Exchange
Rights to Purchase Common Stock New York Stock Exchange
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A.(c)(1), please
check the following box. [ ]
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
(Title of class)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
Reference is hereby made to Registrant's Registration Statement on Form
S-1 (File No. 333-43141), as filed on December 23, 1997, as amended, and
particularly to the descriptions of the Rights Agreement set forth under the
caption "Description of Capital Stock--Rights Agreement" beginning on page 49
thereof. Such Registration Statement is hereby incorporated by reference herein.
ITEM 2. EXHIBITS
The following exhibits are filed with this Registration Statement on
Form 8-A pursuant to the requirements of Section 12(b) of the Securities
Exchange Act of 1934:
1. Rights Agreement, dated as of March 3, 1998, between
Championship Auto Racing Teams, Inc. and Norwest Bank
Minnesota, National Association, including the form of Rights
Certificate (and form of assignment relating thereto) and the
Summary of Rights attached thereto as Exhibits A and B,
respectively.
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2. Registration Statement on Form S-1 dated December 23, 1997,
filed with the Securities and Exchange Commission, as amended.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
CHAMPIONSHIP AUTO RACING TEAMS, INC.
DATE: March 6, 1998
BY: /s/ Andrew Craig
--------------------------------
Andrew Craig, President
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RIGHTS AGREEMENT
BETWEEN
CHAMPIONSHIP AUTO RACING TEAMS, INC.
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
MARCH 3, 1998
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TABLE OF CONTENTS
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Page
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1. CERTAIN DEFINITIONS............................................................................................1
2. APPOINTMENT OF RIGHTS AGENT....................................................................................5
3. ISSUE OF RIGHTS CERTIFICATES...................................................................................5
4. FORM OF RIGHTS CERTIFICATES....................................................................................6
5. COUNTERSIGNATURE AND REGISTRATION..............................................................................7
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN
RIGHTS CERTIFICATES...............................................................................................7
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS..................................................8
8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES...........................................................10
9. AVAILABILITY OF COMMON SHARES.................................................................................10
10. RECORD HOLDERS OF COMMON SHARES ISSUED UPON EXERCISE OF RIGHTS...............................................11
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF COMMON SHARES OR NUMBER OF RIGHTS...........................12
12. CERTIFICATE OF ADJUSTMENT....................................................................................17
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.........................................17
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES......................................................................20
15. RIGHTS OF ACTION.............................................................................................21
16. AGREEMENT OF RIGHT HOLDERS...................................................................................21
17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER...........................................................22
18. CONCERNING THE RIGHTS AGENT..................................................................................22
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT....................................................23
20. DUTIES OF RIGHTS AGENT.......................................................................................23
21. CHANGE OF RIGHTS AGENT.......................................................................................25
22. ISSUANCE OF NEW RIGHTS CERTIFICATES..........................................................................25
23. REDEMPTION...................................................................................................26
24. EXCHANGE.....................................................................................................27
25. NOTICE OF CERTAIN EVENTS.....................................................................................27
26. NOTICES......................................................................................................28
27. SUPPLEMENTS AND AMENDMENTS...................................................................................29
28. SUCCESSORS...................................................................................................30
</TABLE>
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<TABLE>
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29. DETERMINATIONS BY THE BOARD OF DIRECTORS.....................................................................30
30. BENEFITS OF THIS RIGHTS AGREEMENT............................................................................30
31. SEVERABILITY.................................................................................................30
32. GOVERNING LAW................................................................................................31
33. COUNTERPARTS.................................................................................................31
34. DESCRIPTIVE HEADINGS.........................................................................................31
</TABLE>
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RIGHTS AGREEMENT
This Rights Agreement (the "Rights Agreement"), is effective as of
March 3, 1998, between Championship Auto Racing Teams, Inc., a Delaware
corporation (the "Company"), and Norwest Bank Minnesota, National Association
(the "Rights Agent").
WITNESSETH:
-----------
WHEREAS, on March 3, 1998, the Board of Directors of the Company
authorized and declared a dividend of one common share purchase right for each
share of the Company's common stock outstanding at the close of business on
March 6, 1998, (the "Record Date"), each such right representing the right to
purchase one share of the Company's common stock upon the terms and subject to
the conditions therein set forth. At that time the Board further authorized and
directed the issuance of one common share purchase right with respect to each
share of the Company's common stock that becomes outstanding between the Record
Date and the Distribution Date (as hereinafter defined);
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS
For purposes of this Rights Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall become, at any time
after the date of this Rights Agreement (whether or not such status
continues for any period), the Beneficial Owner of Common Shares
representing fifteen percent (15%) or more of the Common Shares then
outstanding, other than as a result of a Permitted Offer.
Notwithstanding the foregoing, (A) the term "Acquiring Person" shall
not include (i) the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company,
or any entity holding Common Shares for or pursuant to the terms of any
such plan (e.g. trustee or plan fiduciary), or (ii) any Person, who or
which together with all Affiliates and Associates of such Person
becomes the Beneficial Owner of fifteen percent (15%) or more of the
then outstanding Common Shares as a result of the acquisition of Common
Shares directly from the Company (provided, however, that if, after
such acquisition, such Person, or an Affiliate or Associate of such
Person, becomes the Beneficial Owner of any additional Common Shares in
an acquisition not made directly from the Company, then such Person
shall be deemed an Acquiring Person), and (B) no Person shall be deemed
to be an "Acquiring Person" either (X) as a result of the acquisition
of Common Shares by the Company which, by reducing the number of Common
Shares outstanding, increases the proportional number of shares
beneficially owned by such Person together with all Affiliates and
Associates of such Person; except that if (i) a Person would become an
Acquiring Person (but for the operation of this subclause (X)) as a
result of the acquisition of Common Shares by
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the Company, and (ii) after such share acquisition by the Company, such
Person, or an Affiliate or Associate of such Person, becomes the
Beneficial Owner of any additional Common Shares, then such Person
shall be deemed an Acquiring Person, or (Y) if (i) such Person, or an
Affiliate or Associate of such Person inadvertently becomes the
Beneficial Owner of fifteen percent (15%) or more of the outstanding
Common Shares, (ii) within eight (8) days thereafter such Person
notifies the Board of Directors that such Person did so inadvertently,
and (iii) within two (2) Business Days after such notification, such
Person is the Beneficial Owner of less than fifteen percent (15%) of
the outstanding Common Shares.
(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 Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to have acquired "beneficial ownership" of, or to "beneficially own",
any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as of the date hereof;
(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 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 acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of any securities
of the Company. Notwithstanding anything in this definition of
"Beneficial Owner" to the contrary, the phrase "then
outstanding", when used with reference to a Person's
beneficial ownership
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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 Michigan 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., Troy,
Michigan time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Troy, Michigan time, on the
next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
shares of the Company's common stock, par value $.01 per share, and any
other class or classes or series of common stock of the Company
resulting from any subdivision, combination, recapitalization or
reclassification of shares of such common stock. "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) "Company" shall have the meaning set forth in the recitals to this
Rights Agreement.
(h) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, as in effect on the date of this Rights Agreement.
(j) "Exchange Ratio" shall have the meaning set forth in Section 24 hereof.
(k) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(l) "Permitted Offer" shall mean a tender or exchange offer which is for
all outstanding Common Shares at a price and on terms determined, prior
to the purchase of shares under such tender or exchange offer, by at
least a majority of the members of the Board of Directors who are not
officers of the Company and who are not (or would not be, if the offer
were consummated) Acquiring Persons or Affiliates, Associates, nominees
or representatives of an Acquiring Person, to be adequate and otherwise
in the best interests of the Company and its stockholders (other than
the Person or any Affiliate or Associate thereof on whose basis the
offer is being made). In determining whether an offer is adequate or in
the best interests of the Company and its stockholders, the Board may
take into account all factors that it deems relevant including, without
limitation, (1) the consideration being offered in the proposal in
relation to the Board's estimate of: (i) the current value of the
Company in a freely negotiated sale of either the Company by merger,
consolidation or otherwise, or all or substantially all of the
Company's assets, (ii) the current value of the Company if orderly
liquidated, and (iii) the future value of the Company over a period of
years as an independent entity discounted to current value; (2) then
existing political, economic and other factors bearing on security
prices generally or the current market value of the Company's
securities in particular; (3) whether the proposal might violate
federal, state or local laws; (4) social, legal and economic effects on
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employees, suppliers, customers and others having similar relationships
with the Company, and the communities in which the Company conducts its
businesses; (5) the financial condition and earnings prospects of the
person making the proposal including the person's ability to service
its debt and other existing or likely financial obligations; and (6)
the competence, experience and integrity of the person making the
acquisition proposal.
(m) "Person" shall mean any individual, firm, partnership, corporation,
trust, association, joint venture or other entity, and shall include
any successor (by merger or otherwise) of such entity.
(n) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(o) "Purchase Price" shall have the meaning set forth in Section 7(a)
hereof.
(p) "Record Date" shall have the meaning set forth in the recitals to this
Rights Agreement.
(q) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(r) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(s) "Rights" shall mean the rights to purchase Common Shares authorized by
the Board of Directors of the Company after the Record Date.
(t) "Rights Agent" shall have the meaning set forth in the recitals to this
Rights Agreement.
(u) "Rights Agreement" shall have the meaning set forth in the recitals to
this Rights Agreement.
(v) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
(w) "Securities Act" shall mean the Securities Act of 1933, as amended, as
in effect from time to time during the term of this Rights Agreement.
(x) "Shares Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such; provided, that, if such Person is determined
not to have become an Acquiring Person pursuant to Section 1(a) hereof,
then no Shares Acquisition Date shall be deemed to have occurred.
(y) "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.
(z) "Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
(aa) "Trading Day" shall have the meaning set forth in Section 11(d) hereof.
(bb) "Voting Securities" shall have the meaning set forth in Section 13(a)
hereof.
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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 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.
3. ISSUE OF RIGHTS CERTIFICATES
(a) Until the earlier of (i) the close of business on the tenth (10th) day
after the Shares Acquisition Date; or (ii) the close of business on the
tenth (10th) Business Day (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as
any Person becomes an Acquiring Person) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan 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) is first published or sent or
given within the meaning of Rule 14d-2 of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such
Person would be the Beneficial Owner of fifteen percent (15%) or more
of the shares of Common Stock then outstanding; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of Section 3(b)
hereof) by the certificates for the Common Shares registered in the
names of the holders thereof (which certificates shall also be deemed
to be certificates for Rights) and not by separate certificates, and
(y) the Rights (and the right to receive separate certificates ("Rights
Certificates")) will be transferable only in connection with the
transfer of the underlying Common Shares (including a transfer to the
Company) as more fully set out below. 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, 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 Rights Certificate, which shall be in
substantially the form of Exhibit A hereto (the "Rights Certificate"),
evidencing one Right for each Common Share so held. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Common Shares, in
substantially the form of Exhibit B hereto (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of Common
Shares as of the close of business on the Record Date, at the address
of such holder shown on the records of the Company. Until the
Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for
Common Shares outstanding, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the
Rights associated with the Common Shares.
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(c) Certificates for Common Shares which become outstanding (including,
without limitation, re-acquired shares which are subsequently disposed
of by the Company) after the Record Date but prior to the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement, as it may from
time to time be supplemented or amended, between Championship Auto
Racing Teams, Inc. and Norwest Bank Minnesota, National
Association, (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 Championship Auto
Racing Teams, Inc. Under certain circumstances, as set forth in
the Rights Agreement, such rights may be redeemed or exchanged,
may expire, or may be evidenced by separate certificates and no
longer be evidenced by this certificate. Championship Auto Racing
Teams, Inc. will mail to the holder of this certificate a copy of
the Rights Agreement without charge within five days after receipt
of a written request therefor. Under certain circumstances, rights
issued to or held by Acquiring Persons or their Affiliates or
Associates (as defined in the Rights Agreement) and any subsequent
holder of such rights 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 therewith. In the event that the Company
purchases or acquires any Common Shares prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
unless and until such Common Shares are subsequently issued by the Company so
that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
4. FORM OF RIGHTS CERTIFICATES
(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall be substantially
the same as provided for in Section 3(a) hereof 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 Rights Agreement, or
as may be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed,
or to conform to usage. Subject to the provisions of Section 22 hereof,
the Rights Certificates shall entitle the holders thereof to purchase
such number and kind of Common Shares as shall be set forth therein at
the price per share set forth therein, but the number and kind of such
Common Shares and the price per share shall be subject to adjustment as
provided herein.
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(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights which are null and void pursuant to
Section 11(a)(ii) of this Rights Agreement, and any Rights Certificate
issued pursuant to Section 6, Section 11 or Section 22 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby are null and
void."
Notwithstanding the above provision, failure to place such legend on
any Rights Certificate representing Rights which are otherwise null and void
pursuant to the terms of this Rights Agreement, shall not affect the null and
void status of such Rights.
5. COUNTERSIGNATURE AND REGISTRATION
The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Chief Executive Officer, its President, any of
its Vice Presidents, or its Treasurer, either manually or by facsimile
signature, and shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights 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 Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate place
for surrender of such Rights Certificate or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS 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
Rights Certificate or Rights Certificates (other than Rights Certificates
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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 Rights Certificate or Rights
Certificates, respectively, entitling the registered holder to purchase a like
number and kind of Common Shares as the Rights Certificate or Rights
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged at the principal
office or offices of the Rights Agent designated for such purpose. Thereupon,
the Rights Agent shall countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
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 Rights 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 Rights 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 Rights Certificate if mutilated, the Company will
make and deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS
(a) Subject to Section 11(a)(ii) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment of the price
per share (rounded to the nearest cent) provided for in paragraph (b)
below (the "Purchase Price") for each Common Share as to which the
Rights are exercised, at or prior to the earliest of (i) the close of
business on March 3, 2008 (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.
(b) The Purchase Price for each Common Share pursuant to the exercise of a
Right shall initially be $80, subject to adjustment from time to time
as provided in Sections 11 and 13 hereof, and shall be payable in
lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Common Shares to be purchased and
an amount equal to any applicable transfer tax required to be paid by
the holder of such Rights 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
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thereupon promptly (i) requisition from any transfer agent of the
Common Shares certificates for the number and kind of Common Shares to
be purchased (or depository receipts when appropriate) and the Company
hereby irrevocably authorizes its transfer agents to comply with all
such requests, (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 such
certificates, cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder and (iv) when
appropriate, after receipt, deliver such cash to or upon the order of
the registered holder of such Rights Certificate.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall
be issued by the Rights Agent to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything to the contrary in this Rights Agreement, from
and after the first occurrence of any Event under Sections 11(a)(ii) or
13(a), any Rights beneficially owned by (i) any Acquiring Person (or
any Associate or Affiliate of an Acquiring Person), (ii) a transferee
of an Acquiring Person (or any Associate or Affiliate of an Acquiring
Person) which becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or any Associate or
Affiliate of an acquiring Person) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or any Associate or Affiliate
of such Acquiring Person) to holders of equity interests in such
Acquiring Person (or of such Associate or Affiliate) or to any Person
with whom the Acquiring Person has any agreement, arrangement or
understanding regarding the transferred Rights, or (B) a transfer that
the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has a primary purpose or effect the
avoidance of this Section 7(e), shall be null and void without any
further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of
this Rights Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) are complied with, but shall have no liability to any
holder of Rights or any other Person as a result of its failure to make
any determination under this Section 7(e) or such Section 4(b) with
respect to any Acquiring Person or an Associate or Affiliate of an
Acquiring Person or their transferees.
(f) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported transfer or exercise unless such registered
holder shall have (i) completed and signed the certificate following
the form of assignment or election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such assignment or
exercise, and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
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<PAGE> 13
(g) So long as the Common Shares issuable upon the exercise of Rights may
be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights
become exerciseable, all shares reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such exercise.
8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or 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 Rights 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 Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
9. AVAILABILITY OF COMMON SHARES
(a) Subject to the Company's rights under Section 11(a)(iii) to otherwise
fulfill its obligations hereunder, the Company covenants and agrees
that it will cause to be reserved and kept available, out of its
authorized and unissued Common Shares or any Common Shares held in its
treasury, the number and kind of Common Shares that will be sufficient
to permit the exercise in full of all outstanding Rights in accordance
with this Rights Agreement; provided, however, that such action need
not be taken with respect to Common Shares (or other securities)
issuable upon exercise of the Rights until after such time as the
Rights become exercisable, and with respect to Common Shares (or other
securities) issuable upon occurrence of an event under Sections
11(a)(ii) or 13 until the occurrence of such event.
(b) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable Common
Shares.
(c) The Company shall use its best efforts to (i) file, as soon as is
practicable following the earliest date after the first occurrence of
an Event under Sections 11(a)(ii) or 13 in which the consideration to
be delivered by the Company upon exercise of the Rights has been
determined in accordance with Sections 11(a)(ii) (or Sections
11(a)(iii) and 13 hereof), or as soon as is required by law following
the Distribution Date, as the case may be, a registration statement
under the Securities Act, with respect to the Common Shares or other
securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all
times
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<PAGE> 14
meeting the requirements of the Securities Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for such
securities , or (B) the Final Expiration Date. The Company will also
take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states and other
appropriate jurisdictions in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time not
to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this paragraph, the exercisability of the Rights
in order to prepare and file such registration statement and permit it
to become effective and to take such actions under such other
securities or blue sky laws and permit them to become effective. Upon
any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction if the requisite qualification in such jurisdiction
shall not have been obtained or the exercise thereof shall not be
permitted under applicable law or a registration statement shall not
have been declared effective.
(d) The Company covenants and agrees that it will pay, when due and
payable, any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Rights
Certificates or of any Common 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
Certificates to a person other than, or the issuance or delivery of
certificates or depository receipts for the Common Shares in a name
other than that of, the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise or to issue or to deliver
any certificates for Common 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 Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction
that no such tax is due.
10. RECORD HOLDERS OF COMMON SHARES ISSUED UPON EXERCISE OF RIGHTS
Each person in whose name any certificate for Common Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Company's transfer
books for the Common Shares are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which such transfer books are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a holder of Common Shares for which the
Rights evidenced thereby 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.
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<PAGE> 15
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF COMMON SHARES OR
NUMBER OF RIGHTS
The Purchase Price, the number of Common Shares or other securities
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 Common Shares payable in Common Shares,
(B) subdivide the outstanding Common Shares into a greater number of
such shares, (C) combine the outstanding Common Shares into a smaller
number of such shares, or (D) issue any shares of its capital stock in
a reclassification of Common 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
for Rights 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, upon payment of the Purchase Price
then in effect, 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 Common 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
(1) such Right be less than the per share par value of the Common
Shares. If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Rights Agreement, in the event any
Person becomes an Acquiring Person, then the Purchase Price for each
Common Share issuable upon exercise of Rights shall be reduced to an
amount equal to fifty percent (50%) of the current market price per
share of such Common Share (determined pursuant to Section 11(d)) on
the Shares Acquisition Date. Notwithstanding the above, if the
transaction that would otherwise give rise to the foregoing adjustment
is also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment shall be
made pursuant to this Section 11(a)(ii).
From and after the occurrence of the event described above,
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
Rights Agreement. No Rights Certificate shall be issued pursuant to
Section 3 that represents Rights beneficially owned by an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or
any Associate or Affiliate thereof; no Rights Certificate shall be
issued at any time upon the transfer
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<PAGE> 16
of any Rights to or from an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate
thereof or to or from any nominee of such Acquiring Person, Associate
or Affiliate; and any Rights Certificate delivered to the Rights Agent
for transfer to or from an Acquiring Person (or any Associate,
Affiliate or nominee of such Acquiring Person) whose Rights would be
void pursuant to the preceding sentence shall be canceled.
(iii) In the event that there shall not be sufficient Common Shares
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, to the extent permitted by
applicable law, take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the Rights,
including the calling of a meeting of shareholders; provided, however,
if the Company is unable to cause the authorization of additional
Common Shares then the Company, to the extent necessary and permitted
by applicable law and any agreements or instruments in effect on the
date hereof to which it is a party, shall, at its option (A) pay cash
equal to twice the applicable Purchase Price (as adjusted pursuant to
this Section 11) in lieu of issuing any such Common Shares and
requiring payment therefor, or (B) issue equity securities having a
value equal to the market price of Common Shares which otherwise would
have been issuable pursuant to the foregoing subparagraph (ii), which
value shall be determined by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent, or (C) distribute a combination of Common Shares, cash
and/or other equity securities having a value equal to the market price
of the shares of the Common Shares which are otherwise issuable
pursuant to the foregoing subparagraph (ii), determined in accordance
with the preceding clause (B), upon exercise of the related Rights.
(b) In case the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Common
Shares entitling them (for a period expiring within forty-five (45)
calendar days after such record date) to subscribe for or purchase
Common Shares, or securities convertible into Common Shares at a price
per share (or having a conversion price per share, if a security
convertible into Common Shares) less than the then current per share
market price (as defined in Section 11(d)) of the Common Shares 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 Common Shares outstanding on such record
date plus the number of Common Shares which the aggregate offering
price of the total number of shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price and the
denominator of which shall be the number of Common Shares outstanding
on such record date plus the number of additional Common 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 (1) Right be less than the per share par value of the
shares of capital stock of the Company issuable upon exercise of one
(1) Right. In case such subscription price may be paid in 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. Common Shares owned by or held
for the account of
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<PAGE> 17
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 Common 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, a dividend payable in Common Shares or other distribution
referred to in Section 11(a) hereof) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof) the Purchase
Price 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 Common Shares on such record
date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent) of the portion of such assets or evidences
of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one (1) Common Share and the denominator of
which shall be such current per share market price of the Common
Shares; provided, however, that in no event shall the consideration to
be paid upon the exercise of one (1) Right be less than the per share
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) For the purpose of any computation hereunder, the "current per share
market price" of a Common Share on any date shall be deemed to be the
average of the daily closing prices per share of a Common Share for the
thirty (30) consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current per share market
price of a Common Share is determined during a period following the
announcement by the Company of (i) a dividend or distribution on the
Common Shares, payable in Common Shares or securities convertible into
Common Shares, or (ii) any subdivision, combination or reclassification
of the Common Shares, and prior to the expiration of thirty (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 of one (1) Common Share. 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
Common Shares 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 Common Shares are listed or
admitted to trading or, if Common Shares 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
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<PAGE> 18
prices in the over-the-counter market, as reported by the Nasdaq Stock
Market or other such system then in use, or, if on any such date Common
Shares 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 Common Shares, selected by the Board of
Directors of the Company. If on any such date no market-maker is making
a market in Common Shares, the fair value of Common Shares on such date
as determined in good faith by the Board of Directors of the Company
shall be used, whose determination shall be described in a statement
filed with the Rights Agent. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which Common Shares
are listed or admitted to trading is open for the transaction of
business or, if Common Shares are not listed or admitted to trading on
any national securities exchange, a Business Day. If Common Shares are
not publicly held or so listed or traded, "current per share market
price" shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) 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
thousandth of a share as the case may be.
(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 Common
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 Common Shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10, 13 and
14 with respect to the Common Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder to the Purchase Price applicable thereto
shall evidence the right to purchase, at the adjusted Purchase Price,
the number of Common Shares or other capital stock purchasable from
time to time hereunder upon exercise of such Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c), each related Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, the number of Common Shares (calculated to the nearest one
thousandth of a share) obtained by (i) multiplying (x) the number of
shares covered by such Right immediately prior to this adjustment by
(y) the Purchase Price in effect immediately prior to such Purchase
Price adjustment and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such Purchase Price
adjustment.
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<PAGE> 19
(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 Common Shares purchasable upon the exercise
of a Right. Each of such Rights outstanding after such adjustment of
the number of such Rights shall be exercisable for the number of Common
Shares for which such Right was exercisable immediately prior to such
adjustment. Each such Right held of record prior to such adjustment of
the number of Rights shall become that number of such Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of such
Purchase Price by the Purchase Price in effect immediately after such
adjustment. The Company shall make a public announcement of its
election to adjust the number of Rights indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later
than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of such Rights pursuant
to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of such Rights
Certificates on such record date additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for such Rights Certificates
held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein
and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of Common Shares which were
expressed in such Rights Certificates theretofore issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common 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 Common 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 holder of any related Right exercised
after such record date the Common Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the Common Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
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<PAGE> 20
(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 (i) any consolidation or subdivision of the
Common Shares, (ii) issuance wholly for cash of any Common Shares at
less than the current market price, (iii) issuance wholly for cash of
Common Shares or securities which by their terms are convertible into
or exchangeable for Common Shares, (iv) dividends on Common Shares
payable in Common Shares or (v) issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the Company
to holders of Common Shares, shall not be taxable to such stockholders.
(n) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Sections 23 or 27 hereof, take (or
permit any Subsidiary to take) any action the purpose of which is to,
or if at the time such action is taken it is reasonably foreseeable
that the effect of such action is to, materially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
12. CERTIFICATE OF ADJUSTMENT
Whenever an adjustment is made as provided in Sections 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 a copy of such certificate and, (c) include a brief summary thereof in
the next quarterly or current report filed pursuant to the Exchange Act by the
Company, and, following the Distribution Date, mail such summary to each holder
of a Rights Certificate in accordance with Section 25 hereof.
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER
(a) In the event that, on or following the Distribution Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and
into any other Person, (y) the Company shall consolidate with, or merge
with, any other Person, and the Company shall be the continuing or
surviving corporation of such consolidation or merger (other than, in a
case of any transaction described in (x) or (y), a merger or
consolidation which would result in all of the securities generally
entitled to vote in the election of directors ("voting securities") of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
securities of the surviving entity) all of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation and the holders of such securities not having
changed as a result of such merger or consolidation), or (z) the
Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or a series of
related transactions, assets or earning power aggregating more than
fifty percent (50%) of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person (other than the
Company
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<PAGE> 21
or any Subsidiary of the Company in one or more transactions each of
which does not violate Section 11(n) hereof), then, and in each such
case (except as provided in Section 13(d) hereof), proper provision
shall be made so that (i) each holder of a Right, except as provided in
Section 11(a) hereof, shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase
Price (without giving effect to any adjustment to such Purchase Price
pursuant to Section 11(a)(ii)) multiplied by the number of Common
Shares for which such Right is then exercisable, in accordance with the
terms of this Rights Agreement, such number of freely tradable Common
Shares of the Principal Party, not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall equal the
result obtained by (A) multiplying the then current Purchase Price
(without giving effect to any adjustment to such Purchase Price
pursuant to Section 11(a)(ii)) by the number of Common Shares for which
such Right is then exercisable and dividing that product by (B) fifty
percent (50%) of the then current per share market price of the Common
Shares of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale
or transfer; (ii) such Principal Party 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 Rights Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of an event described in
this Section 13; and (iv) such Principal Party 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.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares of the
Company are converted in such merger or consolidation, and if
no securities are so issued, the Person that is the other
party to such merger or consolidation (including, if
applicable, the Company if it is the surviving corporation);
and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earnings power
transferred pursuant to such transaction or transactions;
provided, however, that in any of the foregoing cases (a) if
the Common Shares of such Person are not at such time and have
not been continuously over the preceding twelve (12) month
period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another
Person the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other
Person; (b) in case such Person is a Subsidiary, directly or
indirectly, of more than one (1) Person, the Common Shares of
two (2) or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is
the issuer of the Common Shares having the greatest aggregate
market
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<PAGE> 22
value; and (c) in case such Person is owned, directly or
indirectly, by a joint venture formed by two (2) or more
Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in (a) and (b) above shall
apply to each of the chains of ownership having an interest in
such joint ventures as if such party were a "Subsidiary" of
both or all of such joint ventures and the Principal Parties
in each such chain shall bear the obligations set forth in
this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number
of its authorized Common Shares which have not been issued or reserved
for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or
transfer mentioned in paragraph (a) of this Section 13, the Principal
Party at its own expense shall:
(i) prepare and file a registration statement under the Securities
Act of 1933, as amended, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of such Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or
appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10
under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that the
events described in this Section 13 shall occur at any time after the occurrence
of the events described in Section 11(a)(ii), the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x)
and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired Common Shares pursuant to a Permitted
Offer (or a wholly owned subsidiary of any such Person or Persons),
(ii) the price per share of the Common Shares offered in such
transaction is not less than the price per share of Common Shares whose
shares were purchased pursuant to such tender offer or exchange offer
and (iii) the form of consideration being offered to the remaining
holders of shares of Common Shares pursuant to such transaction is the
same as the form of consideration paid pursuant to such
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<PAGE> 23
tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Company shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall
be the closing price of such 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 such 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 Stock Market 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 such 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 such
Rights on such date 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, shall be used.
(b) The Company shall not be required to issue fractions of Common Shares
upon (i) exercise of the Rights or exchange of the Rights for Common
Shares pursuant to Section 24 of this Rights Agreement, or to
distribute certificates which evidence fractional shares of such
securities. Fractions of Common Shares may, at the election of the
Company, be evidenced by depository receipts, pursuant to an
appropriate agreement between the Company and a depository selected by
it; provided that such agreement shall provide that the holders of such
depository receipts shall have the rights, privileges and preferences
to which they are entitled as beneficial owners of the Common Shares
represented by such depository receipts. In lieu of fractional Common
Shares or depository receipts, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of the
current market value of one Common Share. For the purposes of this
Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading Day immediately prior
to the date of such exercise.
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<PAGE> 24
(c) The holder of a Right by the acceptance of such Right expressly waives
his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
15. RIGHTS OF ACTION
All rights of action in respect of this Rights 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 Certificates (and, prior to
the Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Rights 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 Rights 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 Rights Agreement.
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 Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Rights Certificate (or, prior to the Distribution Date, the
associated certificates for Common Shares) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated certificates for 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; and
(d) notwithstanding anything in this Rights Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in a Right or other
Person as a result of its inability to perform any of its obligations
under this Rights Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or
21
<PAGE> 25
administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.
17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the Common
Shares or any other securities of the Company, which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
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 Rights
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
Rights Agreement, including the costs and expenses of defending against any
claim of liability, and the indemnity provided for herein shall survive the
expiration of the Rights and the termination of this Rights Agreement.
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 Rights Agreement in reliance upon any Rights
Certificate or certificate for the Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
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.
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<PAGE> 26
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 all or substantially all of the corporate trust business of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Rights Agreement any of
the Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates have the full force
provided in the Rights Certificates and in this Rights Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
the Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Rights Agreement.
20. DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this
Rights Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Rights 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 Chief Executive
Officer, 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
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<PAGE> 27
the Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Rights 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 Rights Agreement or in
the Rights Certificates (except its countersignature on such Rights
Certificates) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights 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 Rights Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Rights Agreement or in any Rights 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 Sections 3, 11, 13,
23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual notice
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 Common Shares to be issued pursuant
to this Rights Agreement or any Rights Certificate or as to whether any
Common 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 Rights
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 Chief Executive Officer,
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 stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as
though it were not Rights Agent under this Rights Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
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(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.
21. CHANGE OF RIGHTS AGENT
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Rights Agreement upon thirty (30) days'
notice in writing mailed to the Company and to each transfer agent of the Common
Shares by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice submit his Rights Certificate
for inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, 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
Twenty-Five Million Dollars ($25,000,000), or (b) an affiliate of a corporation
described in clause (a) of this sentence. 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 and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
22. ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Rights Agreement or of
the Rights to the contrary the Company may, at its option, issue new Rights
Certificates evidencing Rights in such
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form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Rights Agreement.
In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company (a) shall with respect to Common
Shares so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (i) the
Company shall not be obligated to issue any such Rights Certificates if, and to
the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
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 of the then outstanding Rights at an initial
redemption price of $.01 per Right ("Redemption Price"). The Redemption
Price shall be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof. 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 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 ten (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 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.
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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 Common Shares at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan
entered into by the Company to secure benefits payable under any
employee benefit plan of the Company or any Subsidiary of the Company),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of Common Shares representing fifty percent (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 subsection (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 Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any 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 shall promptly mail a notice of any such
exchange to all of the holders of such Rights at such 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 Common
Shares for Rights will be effected and, in the event of any partial
exchange, the number and kind 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 such
Rights.
(c) In the event that there shall not be sufficient Common Shares issued
but not outstanding 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 Common Shares for issuance upon exchange of the Rights or
shall take such other action specified in Section 11(a)(iii) hereof.
25. NOTICE OF CERTAIN EVENTS
(a) In case the Company, following the Distribution Date, shall propose (i)
to pay any dividend payable in stock of any class or series to holders
of Common Shares or to make any other distribution to holders of Common
Shares (other than a regular quarterly cash dividend), (ii) to offer to
holders of Common Shares rights or warrants to subscribe for or to
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<PAGE> 31
purchase any additional Common Shares or any other securities, rights
or options, (iii) to effect any reclassification of Common Shares
(other than a reclassification involving only the subdivision of
outstanding Common 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 fifty percent (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 and/or any of its
Subsidiaries in one or more transactions each of which does not violate
Section 11(n) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall
give to each holder of a Rights Certificate, in accordance with Section
26 hereof, a notice of such proposed action to the extent feasible,
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 holders of Common 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 ten (10) days prior
to the record date for determining holders of Common Shares for
purposes of such action, and in the case of any such other action, at
least ten (10) days prior to the date of the taking of such proposed
action or the date of participation therein by holders of Common
Shares, whichever shall be the earlier. The failure to give notice
required by this Section 25 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote
upon any such action.
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, 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.
26. NOTICES
Notices or demands authorized by this Rights Agreement to be given or
made by the Rights Agent or by the holder of any Rights Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Championship Auto Racing Teams, Inc.
755 West Big Beaver Rd., Ste. 800
Troy, Michigan 48084
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
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Norwest Bank Minnesota, N.A.
Shareowner Services
161 North Concord Exchange
South St. Paul, MN 55116
Attention: Corporate Manager - Administration
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
27. SUPPLEMENTS AND AMENDMENTS
Prior to the Distribution Date, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend any provision of this Rights
Agreement without the approval of any holders of certificates representing
Common Shares. From and after the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this Rights
Agreement without the approval of any holders of Rights Certificates in order
(a) to cure any ambiguity, (b) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(c) to shorten or lengthen any time period hereunder or (d) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, however, that this Rights
Agreement may not be supplemented or amended to lengthen, pursuant to clause (c)
of this sentence, (i) a time period relating to when the Rights may be redeemed
at such time as the Rights are not then redeemable, or (ii) any other time
period unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Rights Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof from fifteen percent (15%)
to not less than the greater of (a) any percentage greater than the largest
percentage of the then 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 the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
such plan) together with all Affiliates or Associates of such Person, or (b) ten
percent (10%). Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment, provided that such supplement or amendment does
not adversely affect the rights or obligations of the Rights Agent under Section
18 or Section 20 of this Rights Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Shares.
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28. SUCCESSORS
All the covenants and provisions of this Rights 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.
29. DETERMINATIONS BY THE BOARD OF DIRECTORS
For all purposes of this Rights Agreement, any calculation of the
number of Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the Company shall
have the exclusive power and authority to administer this Rights Agreement and
to exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (a)
interpret the provisions of this Rights Agreement, and (b) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including a determination to redeem or not redeem the Rights
or to amend the Rights Agreement or a determination that an adjustment to the
Redemption Price or Exchange Ratio is or is not appropriate). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board in good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board to any liability to the holders of the Rights.
30. BENEFITS OF THIS RIGHTS AGREEMENT
Nothing in this Rights 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 Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common
Shares).
31. SEVERABILITY
If any term, provision, covenant or restriction of this Rights
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 Rights Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
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32. GOVERNING LAW
This Rights Agreement and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed entirely
within such State.
33. COUNTERPARTS
This Rights 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.
34. DESCRIPTIVE HEADINGS
Descriptive headings of the several Sections of this Rights Agreement
are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and attested, all as of the day and year first
above written.
CHAMPIONSHIP AUTO RACING TEAMS,
INC.
Attest:
By: By:
------------------------------ ------------------------------
Secretary (title)
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
Attest:
By: By:
------------------------------ ------------------------------
Assistant Secretary (title)
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EXHIBIT A
FORM OF RIGHTS CERTIFICATE
Certificate No. R- Rights
----- ------
NOT EXERCISABLE AFTER MARCH 3, 2008 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.
Rights Certificate
CHAMPIONSHIP AUTO RACING TEAMS, 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 March 3, 1998 (the "Rights Agreement"), between
Championship Auto Racing Teams, Inc., a Delaware corporation (the "Company") and
Norwest Bank Minnesota, National Association (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., Troy, Michigan time, on
March 3, 2008, at the principal office of the Rights Agent, or at the office of
its successor as Rights Agent, one fully paid non-assessable share of
Championship Auto Racing Teams, Inc. Common Stock, par value $.01 per share (the
"Stock"), at a purchase price of $80 per share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares of Stock which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of March 6, 1998, (the "Record Date") based on
the shares of Stock of the Company as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of shares of Stock which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. 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 Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Rights Certificate or Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of shares of
Stock as the Rights evidenced by the Rights Certificate or Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled
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to receive upon surrender hereof another Rights Certificate or Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for shares of Stock. No fractional shares of Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the shares of Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
Witness the facsimile signature of the proper officers of the Company.
Dated as of March 6, 1998.
ATTEST: CHAMPIONSHIP AUTO RACING TEAMS,
INC.
By:
------------------------------
Countersigned:
------------------------
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:
------------------------------------
(Authorized Signature)
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EXHIBIT A
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
---------------------
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________, Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ,
--------------------- ---- ------------------------------
Signature
Signature Medallion Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION, (BANKS, STOCK-BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17AD-15.
--------------------------------------------------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: ,
--------------------- ----
------------------------------
Signature
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EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
Effective as of March 3, 1998, the Board of Directors of Championship
Auto Racing Teams, Inc. (the "Company") adopted a Rights Agreement (the "Rights
Agreement") and authorized and declared a dividend of one common share purchase
right (a "Right") for each outstanding share of common stock, par value $.01 per
share of the Company (the "Common Shares"). The dividend is payable on March 9,
1998, to the shareholders of record on March 6, 1998 (the "Record Date"), and
with respect to Common Shares issued thereafter until the Distribution Date (as
hereinafter defined) or the expiration or earlier redemption or exchange of the
Rights. Except as set forth below, each Right entitles the registered holder to
purchase from the Company, at any time after the Distribution Date one Common
Share at a price per share of $80, subject to adjustment (the "Purchase Price").
The description and terms of the Rights are as set forth in the Rights
Agreement.
Initially the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Shares upon the earlier to
occur of (i) ten (10) days after the public announcement of a person's or group
of affiliated or associated persons' having acquired beneficial ownership of
fifteen percent (15%) or more of the outstanding Common Shares (such person or
group being hereinafter referred to as an "Acquiring Person"); or (ii) ten (10)
days (or such later date as the Board may determine) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in a person or group's becoming an
Acquiring Person (the earlier of such dates being called the "Distribution
Date").
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with, and only with, the Common Shares. Until the
Distribution Date (or earlier redemption or expiration), new Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution Date
(and to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Rights Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 3, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding Common
Shares at a price and on terms which a majority of certain members of the Board
of Directors determines to be adequate and in the best interests of the
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Company, its stockholders and other relevant constituencies, other than such
Acquiring Person, its affiliates and associates (a "Permitted Offer")), each
holder of a Right will thereafter have the right (the "Flip-In Right") to
acquire a Common Share for a purchase price equal to fifty percent (50%) of the
then current market price. Notwithstanding the foregoing, all Rights that are,
or were, beneficially owned by any Acquiring Person or any affiliate or
associate thereof will be null and void and not exercisable.
In the event that, at any time following the Distribution Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding Common Shares immediately prior to
the consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than fifty percent (50%) of the
Company's assets or earning power is sold or transferred, then each holder of a
Right (except Rights which have previously been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise and
payment of the Purchase Price, common shares of the acquiring company for a
purchase price equal to fifty percent (50%) of the then current market value. If
a transaction would otherwise result in a holder's having a Flip-In as well as a
Flip-Over Right, then only the Flip-Over Right will be exercisable; if a
transaction results in a holder's having a Flip-Over Right subsequent to a
transaction resulting in a holder's having a Flip-In Right, a holder will have
Flip-Over Rights only to the extent such holder's Flip-In Rights have not been
exercised.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of Common Shares,
(ii) upon the grant to holders of Common Shares of certain rights or warrants to
subscribe for or purchase Common Shares at a price, or securities convertible
into Common Shares with a conversion price, less than the then current market
price of Common Shares, or (iii) upon the distribution to holders of Common
Shares of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable in
Common Shares) or of subscription rights or warrants (other than those referred
to above). However, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least one percent (1%).
No fractional Common Shares will be issued and in lieu thereof, an
adjustment in cash will be made based on the market price of Common Shares on
the last trading day prior to the date of exercise.
At any time prior to the time a person becomes an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by such person or group of Common Shares representing fifty
percent (50%) or more of the then outstanding
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Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights which have become null and void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to adjustment).
All of the provisions of the Rights Agreement may be amended prior to
the Distribution Date by the Board of Directors of the Company for any reason it
deems appropriate. Prior to the Distribution Date, the Board is also authorized,
as it deems appropriate, to lower the thresholds for Acquiring Person to not
less than the greater of (i) any percentage greater than the largest percentage
then held by any stockholder, or (ii) ten percent (10%). After the Distribution
Date, the provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders of the Company, shareholders may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission (Commission File No.____________). A copy of the Rights Agreement is
available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
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