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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
RPM, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
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Ohio 34-6550857
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(State of Incorporation or Organization) (I.R.S. Employer
Identification no.)
P.O Box 777, 2628 Pearl Road, Medina, Ohio 44258
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the registration of a If this form relates to the registration of a
class of securities pursuant to Section 12(b) class of securities pursuant to Section 12(g)
of the Exchange Act and is effective of the Exchange Act and is effective pursuant
pursuant to General Instruction A.(c), please to General Instruction A.(d), please check the
check the following box. [X] following box.[_]
Securities Act registration statement file number to which this form relates:____________________
(If applicable)
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Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Rights to Purchase New York Stock Exchange
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Common Shares
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Securities to be registered pursuant to Section 12(g) of the Act:
Not Applicable
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(Title of Class)
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(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
--------------------------------------------------------
On April 28, 1999, the Board of Directors of RPM, Inc. (the "Company")
declared a dividend distribution of one right (a "Right") for each Common Share,
without par value (the "Common Shares"), of the Company outstanding at the close
of business on May 11, 1999 (the "Record Date"), pursuant to the terms of a
Rights Agreement, dated as of April 28, 1999 (the "Rights Agreement"), between
the Company and Harris Trust and Savings Bank, as Rights Agent. The Rights
Agreement also provides, subject to specified exceptions and limitations, that
Common Shares issued or delivered from the Company's treasury after the Record
Date will be entitled to and accompanied by Rights. The Rights are in all
respects subject to and governed by the provisions of the Rights Agreement, a
copy of which (including all exhibits thereto) is filed as Exhibit 4.1 hereto
and incorporated herein by this reference. A summary description of the Rights
is set forth in Exhibit B to the Rights Agreement.
ITEM 2. EXHIBITS.
---------
Number Description
- ------ -----------
4.1 Rights Agreement (including a Form of Rights Certificate as
Exhibit A thereto and a Summary of Rights to Purchase Common
Shares as Exhibit B thereto)
99.1 Form of letter to shareholders, dated May 12, 1999
99.2 Press release, dated April 28, 1999
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SIGNATURE
---------
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
RPM, INC.
By: /s/ Frank C. Sullivan
-----------------------------------------------
Frank C. Sullivan
Executive Vice President and Chief
Financial Officer (Principal Financial Officer)
Date: May 11, 1999
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EXHIBIT INDEX
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Number Description
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4.1 Rights Agreement (including a Form of Rights Certificate as
Exhibit A thereto and a Summary of Rights to Purchase Common
Shares as Exhibit B thereto)
99.1 Form of letter to shareholders, dated May 12, 1999
99.2 Press release, dated April 28, 1999
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Exhibit 4.1
Execution Copy
RPM, INC.
AND
HARRIS TRUST AND SAVINGS BANK
RIGHTS AGREEMENT
DATED AS OF APRIL 28, 1999
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TABLE OF CONTENTS
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PAGE
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SECTION 1. CERTAIN DEFINITIONS....................................................................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT............................................................................4
SECTION 3. ISSUE OF RIGHT CERTIFICATES............................................................................4
SECTION 4. FORM OF RIGHT CERTIFICATES.............................................................................6
SECTION 5. COUNTERSIGNATURE AND REGISTRATION......................................................................6
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED,
DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES......................................................................7
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS..........................................7
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.....................................................8
SECTION 9. RESERVATION AND AVAILABILITY OF COMMON SHARES..........................................................9
SECTION 10. COMMON SHARES RECORD DATE............................................................................10
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND TYPE OF SHARES OR NUMBER OF RIGHTS..........................11
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES...........................................18
SECTION 13. NOTICE OF ADJUSTED PURCHASE PRICE OR NUMBER OR TYPE OF SHARES TO HOLDERS OF RIGHTS...................18
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES..............................................................18
SECTION 15. RIGHTS OF ACTION.....................................................................................19
SECTION 16. AGREEMENT OF RIGHTS HOLDERS..........................................................................20
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER....................................................20
SECTION 18. CONCERNING THE RIGHTS AGENT..........................................................................21
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT............................................21
SECTION 20. DUTIES OF RIGHTS AGENT...............................................................................22
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<TABLE>
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SECTION 21. CHANGE OF RIGHTS AGENT...............................................................................24
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES...................................................................25
SECTION 23. REDEMPTION...........................................................................................25
SECTION 24. NOTICE OF CERTAIN EVENTS.............................................................................26
SECTION 25. NOTICES..............................................................................................27
SECTION 26. SUPPLEMENTS AND AMENDMENTS...........................................................................28
SECTION 27. EXCHANGE.............................................................................................28
SECTION 28. SUCCESSORS...........................................................................................29
SECTION 29. BENEFITS OF THIS AGREEMENT...........................................................................29
SECTION 30. ACTION BY DIRECTORS..................................................................................29
SECTION 31. SEVERABILITY.........................................................................................30
SECTION 32. GOVERNING LAW........................................................................................30
SECTION 33. COUNTERPARTS.........................................................................................30
SECTION 34. DESCRIPTIVE HEADINGS.................................................................................30
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Rights Agreement, dated as of April 28, 1999, (this
"Agreement"), between RPM, Inc., an Ohio corporation (the "Company"), and Harris
Trust and Savings Bank, an Illinois banking corporation (the "Rights Agent").
RECITALS
--------
On April 28, 1999, the Directors of the Company authorized and
declared a dividend consisting of one right ("Right") for each Common Share,
without par value, of the Company (each, a "Common Share") outstanding as of the
Close of business on May 11, 1999 (the "Record Date"), each Right initially
representing the right to purchase one-tenth of one Common Share on the terms
and subject to the conditions herein set forth, and have further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each Common Share issued or delivered by the Company (whether
originally issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date (in the case of Common
Shares issued upon conversion of the Company's convertible securities, prior to
the tenth day after the Distribution Date), and the Expiration Date (each as
hereinafter defined), or as provided in Section 27.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions.
--------------------
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than the
Company or any Subsidiary or any employee benefit or stock ownership
plan of the Company or of any Subsidiary or any entity holding Common
Shares for or pursuant to any such plan) who or that, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares then outstanding, PROVIDED,
HOWEVER, that a Person will not be deemed to have become an Acquiring
Person solely as a result of a reduction in the number of Common Shares
outstanding unless and until (i) such time as such Person or any
Affiliate or Associate of such Person shall thereafter become the
Beneficial Owner of any additional Common Shares, other than as a
result of a stock dividend, stock split or similar transaction effected
by the Company in which all holders of Common Shares are treated
equally, or (ii) any other Person who is the Beneficial Owner of any
Common Shares shall thereafter become an Affiliate or Associate of such
Person. Notwithstanding the foregoing, if the Directors of the Company
determine in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of
this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares
so that such Person would no longer be an Acquiring Person as defined
pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for any purposes
of this Agreement.
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(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and to
"beneficially own," any securities:
(i) the beneficial ownership of which such Person or any
of such Person's Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights, warrants or
options, or otherwise (in each case, other than upon exercise
or exchange of the Rights); PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to an offer to
purchase or 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
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has or shares the right
to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner,
if such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing) with such other Person (or any of
such other Person's Affiliates or Associates) with respect to
acquiring, holding, voting or disposing of any securities of
the Company;
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security (A) if such Person has
the right to vote such security pursuant to an agreement, arrangement
or understanding (whether or not in writing) which (1) arises solely
from a revocable proxy 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 of the Exchange Act and (2) is not
also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership
arises solely as a result of such Person's status as a "clearing
agency," as defined in Section 3(a)(23) of the Exchange Act; and
PROVIDED, FURTHER, that nothing in this paragraph (c) shall cause a
Person engaged in business as an underwriter of securities to be the
Beneficial Owner of, or to beneficially own, any securities acquired
through such Person's participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of
such acquisition, or such later date as the Directors of the Company
may determine in any specific case.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the States of Ohio,
Illinois or New York (or such
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other state in which the principal office of the Rights Agent is
located) 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., Cleveland, Ohio time, on such date; PROVIDED, HOWEVER, that if
such date is not a Business Day it shall mean 5:00 p.m., Cleveland,
Ohio time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
shall mean the Common Shares, without par value, of the Company;
PROVIDED that, if the Company is the continuing or surviving
corporation in a transaction described in Section 11(d)(ii) hereof,
"Common Shares" when used with reference to the Company shall mean the
capital stock with the greatest aggregate voting power of the Company,
or, if the Company is a subsidiary of another corporation or business
trust, the corporation or business trust that ultimately controls the
Company. "Common Shares" when used with reference to any corporation or
business trust, other than the Company, shall mean the capital stock
with the greatest aggregate voting power of such corporation or
business trust, or, if such corporation or business trust is a
subsidiary of another corporation or business trust, the corporation or
business trust which ultimately controls such first-mentioned
corporation or business trust.
(g) "Distribution Date" shall mean the earlier of: (i) the
close of business on the tenth calendar day following the Share
Acquisition Date, or (ii) the close of business on the tenth Business
Day (or, unless the Distribution Date shall have previously occurred,
such later date as may be specified by the Directors of the Company)
after the date of the commencement of a tender or exchange offer by any
Person (other than the Company or any Subsidiary or any employee
benefit or stock ownership plan of the Company or of any Subsidiary or
any entity holding Common Shares for or pursuant to the terms of any
such plan), if upon the consummation thereof such Person would be the
Beneficial Owner of 15% or more of the then-outstanding Common Shares.
(h) "Expiration Date" shall mean the earliest of (i) the close
of business on the Final Expiration Date, (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof, and (iii) the
time at which all exercisable Rights are exchanged as provided in
Section 27 hereof.
(i) "Final Expiration Date" shall mean the tenth anniversary
of the Record Date.
(j) "Flip-in Event" shall mean the event described in Section
11(a)(ii) hereof.
(k) "Flip-over Event" shall mean any event described in
clauses (i), (ii) or (iii) of Section 11(d) hereof.
(l) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
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(m) "Share Acquisition Date" shall mean the first date of
public announcement by the Company (by press release, filing made with
the Securities and Exchange Commission or otherwise) that an Acquiring
Person has become such.
(n) "Subsidiary" shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by the Company.
(o) "Triggering Event" shall mean any Flip-in Event or
Flip-over Event.
Section 2. Appointment of Rights Agent.
----------------------------
The Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in accordance with Section 3
hereof, shall also be, prior to the Distribution Date, the holders of the Common
Shares) in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment and hereby certifies that it complies with the
requirements of the New York Stock Exchange governing transfer agents and
registrars. The Company may from time to time act as Co-Rights Agent or appoint
such Co-Rights Agents as it may deem necessary or desirable. Any actions which
may be taken by the Rights Agent pursuant to the terms of this Agreement may be
taken by any such Co-Rights Agent. To the extent that any Co-Rights Agent takes
any action pursuant to this Agreement, such Co-Rights Agent shall be entitled to
all of the rights and protections of, and subject to all of the applicable
duties and obligations imposed upon, the Rights Agent pursuant to the terms of
this Agreement.
Section 3. Issue of Right Certificates.
----------------------------
(a) Until the Distribution Date (i) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Shares registered in the names of the record holders
thereof (which certificates for Common Shares shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (ii) the Rights will
be transferable only in connection with the transfer of the underlying Common
Shares in the stock transfer books of the Company maintained by the Company or
its appointed transfer agent. As soon as practicable after the Distribution
Date, the Rights Agent will send, at the expense of the Company, by first-class,
insured, postage prepaid mail, to each record holder of Common Shares as of the
close of business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Right Certificate, in substantially the form of
Exhibit A hereto, evidencing one Right for each Common Share so held, subject to
adjustment, together with a notice setting forth the Purchase Price (as defined
in Section 4 hereof) as in effect on the Distribution Date. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
Any Right Certificate issued pursuant to this Section 3 that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Right Certificate issued at any time upon the transfer
of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate, and any Right
Certificate issued pursuant to Sections 6 or 11 hereof upon transfer, exchange,
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replacement or adjustment of any other Right Certificate referred to in this
sentence, shall be subject to and shall contain the following legend or such
similar legend as the Company may deem appropriate and as is not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or transaction reporting system on
which the Rights may from time to time be listed or quoted, or to conform to
usage:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who is or was an Acquiring
Person or an Affiliate or an Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement). This
Right Certificate and the Rights represented hereby may become
null and void in the circumstances specified in Section
11(a)(ii) or Section 11(d) of the Rights Agreement.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Common Shares,
in substantially the form attached hereto as Exhibit B (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 as of such date. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for Common
Shares registered in the names of the holders thereof. Until the earlier of the
Distribution Date and the Expiration Date, the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date shall also
constitute the surrender for transfer of the Rights associated with the Common
Shares represented thereby.
(c) Certificates for Common Shares issued (including, without
limitation, any certificates for Common Shares issued upon conversion of the
Company's convertible securities or upon exercise of stock options) or
surrendered for transfer or exchange after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date, shall have stamped on,
impressed on, printed on, written on or otherwise affixed to them the following
legend or such similar legend as the Company may deem appropriate and as is not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or transaction
reporting system on which the Common Shares or the Rights may from time to time
be listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
RPM, Inc. and Harris Trust and Savings Bank, dated as of April
28, 1999 (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 RPM, Inc. The
Rights are not exercisable prior to the occurrence of certain
events specified in the Rights Agreement. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may be exchanged, may expire, or may
be evidenced by separate certificates and will no longer be
evidenced by this Certificate. RPM, Inc. will mail to the
holder of this Certificate a copy of the Rights Agreement
without
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charge promptly after receipt of a written request therefor.
Under certain circumstances, Rights that are or were
beneficially owned by an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement) and any subsequent holder of such Rights may become
null and void.
With respect to certificates containing the legend described above, 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
surrender for transfer of the Rights associated with the Common Shares
represented thereby.
Section 4. Form of Right Certificates.
---------------------------
The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit A hereto with such changes, marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and 22 hereof, the Right
Certificates, whenever issued, shall be dated as of the Record Date, and on
their face shall entitle the holders thereof to purchase such number of Common
Shares as shall be set forth therein at the price per whole share set forth
therein (the "Purchase Price"), but the Purchase Price and the number and kind
of securities issuable upon exercise of each Right and the number of Rights
outstanding shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
----------------------------------
The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice President, either
manually or by facsimile signature, and have affixed thereto the Company's seal
or a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the principal office of the Rights Agent designated for
such purpose and at such other offices as may be required to comply with any
applicable law or with any rule or regulations made
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pursuant thereto or with any rule or regulation of any stock exchange or
transaction reporting system on which the Rights may be listed, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
-----------------------------------------------
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
- ----------------------------------------------------------------------------
Subject to the provisions of Sections 7(e) and 14 hereof, at
any time after the close of business on the Distribution Date, and at or prior
to the close of business on the Expiration Date, any Right Certificate or
Certificates representing exercisable rights may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of Common Shares (or
other securities, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in the case
of a transfer) to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Right Certificate, shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent designated for such purpose. Thereupon or
as promptly as practicable thereafter, subject to the provisions of Section 11
and Section 14 hereof, the Company will prepare, execute and deliver to the
Rights Agent, and the Rights Agent will countersign and deliver, a Right
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 Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent, and cancellation of
the Right Certificate if mutilated, the Company will prepare, execute and
deliver a new Right Certificate of like tenor to the Rights Agent and the Rights
Agent shall countersign and deliver such new Right Certificate to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
----------------------------------------------
Date of Rights.
- ---------------
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date and prior to the
Expiration Date, upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for such
purpose, together with payment in cash, in lawful money of the United States of
America by certified check or bank draft payable to the order of the Company,
equal to the sum of (i) the exercise price for the total number of securities as
to which such surrendered Rights are exercised and (ii) an amount equal
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to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with the provisions of Section 9 hereof.
(b) The Purchase Price shall initially be $70.00 (equivalent
to $7.00 for each one-tenth of a Common Share), and shall be subject to
adjustment from time to time as provided in Section 11 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 Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable transfer tax in cash, or by certified check or
bank draft payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of the Common Shares (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of whole Common Shares to be purchased and the Company hereby irrevocably
authorizes and directs its transfer agent to comply with all such requests, (ii)
when appropriate, requisition from the Company the amount of cash to be paid or
depositary receipts to be issued in lieu of the issuance of fractional shares in
accordance with Section 14 hereof or the amount of cash to be paid in lieu of
the issuance of Common Shares in accordance with Sections 11(a)(iii) or 11(d)
hereof, (iii) promptly after receipt of such certificates (or depositary
receipts, when appropriate), cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered holder
of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to any purported transfer, split up,
combination or exchange of any Right Certificate pursuant to Section 6 hereof or
the exercise of a Right Certificate as set forth in this Section 7 unless the
registered holder of such Right Certificate shall have (i) completed and signed
the certificate following the form of assignment or form of election to
purchase, as applicable, set forth on the reverse side of the Right Certificate
surrendered for such transfer, split up, combination, exchange 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 have reasonably requested.
Section 8. Cancellation and Destruction of Right
-----------------------------------------------------
Certificates.
- -------------
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its stock transfer agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates shall be issued in
lieu
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thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Shares.
----------------------------------------------
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 authorized and issued Common Shares held in its treasury, the number of
Common Shares that will be sufficient to permit the exercise pursuant to Section
7 hereof of all outstanding Rights; such number of Common Shares reserved and
kept available shall be adjusted from time to time, if and to the extent
required, upon the occurrence of any of the events described in Section 11
hereof.
So long as the Company's Common Shares are listed on a
national securities exchange or quoted on the Nasdaq National Market, the
Company shall endeavor to cause, from and after such time as the Rights become
exercisable, all Common Shares reserved for issuance upon exercise of the Rights
to be listed on such exchange or included in the Nasdaq National Market, as the
case may be, upon official notice of issuance.
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 be, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), duly and validly
authorized and issued, fully paid, nonassessable and freely tradeable shares,
free and clear of any liens, encumbrances and other adverse claims and not
subject to any rights of call or first refusal.
The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right 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 Right Certificates to a person other than, or the
issuance or delivery of certificates for the Common Shares in a name other than
that of, the registered holder of the Right Certificates evidencing Rights
surrendered for exercise, or to issue or 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 Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
The Company also shall use its best efforts (i) to file on an
appropriate form, as soon as practicable following the Distribution Date, a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of
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<PAGE> 13
(A) the date as of which the Rights are no longer exercisable for such
securities and (B) the Expiration Date. The Company shall also take such action
as may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time 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 to permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement should be filed under the Securities Act
or any state securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights in each relevant
jurisdiction until such time as a registration statement has been declared
effective and, 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 anything in this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
registration or qualification in such jurisdiction shall not have been effected
or the exercise of the Rights shall not be permitted under applicable law.
Notwithstanding anything in this Agreement to the contrary,
after the Distribution Date, the Company shall not, except as permitted by
Section 23 or Section 26 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable that
such action will eliminate or otherwise diminish the benefits intended to be
afforded by the Rights.
In the event that the Company is obligated to pay cash
pursuant to Sections 11 or 14 hereof, it shall make all arrangements necessary
so that such cash is available for distribution by the Rights Agent, if and when
appropriate.
Section 10. Common Shares Record Date.
--------------------------
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 Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the Common Shares
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Common Shares transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including, 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> 14
Section 11. Adjustment of Purchase Price, Number and Type
---------------------------------------------
of Shares or Number of Rights.
- ------------------------------
The Purchase Price, the number and type of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Common Shares payable
in Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the 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) or in Section 11(d) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and type of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Common Shares transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a) (ii) hereof or Section 11(d)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a) (ii) or Section 11(d) hereof.
(ii) In the event that any Person becomes an Acquiring Person,
provision shall be made so that from and after the Distribution Date
each holder of a Right, except as provided below, shall thereafter have
a right to receive, upon exercise thereof in accordance with the terms
of this Agreement at an exercise price per Right equal to the product
of ten (10) times the then-current Purchase Price multiplied by the
number of Common Shares for which a Right is then exercisable, such
number of Common Shares as shall equal the result obtained by (x)
multiplying the product of ten (10) times the then-current Purchase
Price by the number of Common Shares for which a Right was exercisable
immediately prior to the first occurrence of a Triggering Event, and
dividing that product by (y) 50% of the current per share market price
of the Common Shares (determined pursuant to Section 11(e) hereof) on
the date of the occurrence of such event. Notwithstanding anything in
this Agreement to the contrary, from and after the occurrence of such
event (1) any Rights that are or were acquired or beneficially owned by
any Acquiring Person (or any Affiliate or Associate of such Acquiring
Person) shall be void and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of this
Agreement, (2) no Right Certificate shall be issued pursuant to this
Agreement that represents Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof, (3) no Right Certificate
shall be issued at any time upon the transfer of any Rights to an
Acquiring Person
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<PAGE> 15
or any Affiliate or Associate thereof or to any nominee of such
Acquiring Person or Affiliate thereof, and (4) any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person or
any Affiliate or Associate thereof shall be cancelled.
(iii) Upon the occurrence of a Flip-in Event, if there shall
not be sufficient authorized but unissued Common Shares or authorized
and issued Common Shares held in treasury to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii),
the Directors of the Company shall use their best efforts promptly to
authorize additional Common Shares for issuance upon exercise of the
Rights; PROVIDED, HOWEVER, that if at any time after 90 calendar days
after the first occurrence of a Flip-in Event, there shall not be
sufficient Common Shares available for issuance upon the exercise of a
Right, then the Company shall deliver, upon the surrender of such Right
and without requiring payment of the Purchase Price, Common Shares (to
the extent available), and then cash (to the extent permitted by
applicable law and any agreements or instruments to which the Company
is a party in effect immediately prior to the first occurrence of any
Flip-in Event), which Common Shares and cash shall have an aggregate
value equal to the excess of (1) the aggregate current per share market
price of all the Common Shares (determined pursuant to Section 11(e)
hereof) issuable in accordance with subsection (ii) of this Section
11(a) upon the exercise of a Right over (2) the product of ten (10)
times the then-current Purchase Price multiplied by the number of
Common Shares for which a Right was exercisable immediately prior to
the first occurrence of a Triggering Event. To the extent that any
legal or contractual restrictions prevent the Company from paying the
full amount of cash payable in accordance with the foregoing sentence,
the Company shall pay to holders of the Rights as to which such
payments are being made all amounts which are not then restricted on a
pro rata basis. The Company shall continue to make payments on a pro
rata basis as funds become available until such payments have been paid
in full.
(b) In the event that the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or shares having the same
rights, privileges and preferences as the Common Shares ("equivalent common
shares")) or securities convertible into Common Shares or equivalent common
shares at a price per Common Share or equivalent common share (or having a
conversion price per share, if a security convertible into Common Shares or
equivalent common shares) less than the current per share market price of the
Common Shares (as determined pursuant to Section 11(e) hereof) 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 Common Shares and/or
equivalent common 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 and/or equivalent common shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Directors of
the Company, whose determination shall be
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<PAGE> 16
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes. Common Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In the event that 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, cash (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last cash dividend theretofore paid), assets,
stock (other than a dividend payable in Common Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current per share market
price of the Common Shares (as determined pursuant to Section 11(e) hereof) on
such record date, less the fair market value (as determined in good faith by the
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes) of the
portion of the cash, assets, stock or evidences of indebtedness so to be
distributed (in the case of regular periodic cash dividends at a rate in excess
of 125% of the rate of the last cash dividend theretofore paid, only that
portion in excess of 125% of such rate) or of such subscription rights, options
or warrants applicable to one Common Share, and the denominator of which shall
be such current per share market price of the Common Shares. 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) In the event that, following the Share Acquisition Date,
directly or indirectly:
(i) the Company shall consolidate with, or merge with or
into, any other Person and the Company shall not be the continuing or
surviving corporation of such consolidation or merger; or
(ii) any Person shall consolidate with the Company, or
merge with or into the Company and the Company shall be the continuing
or surviving corporation of such merger or consolidation and, in
connection with such merger or consolidation, all or part of the Common
Shares shall be changed into or exchanged for stock or other securities
of any other Person or cash or any other property; or
(iii) the Company shall sell or otherwise transfer (or one
or more Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or
any Subsidiaries) representing in the aggregate more than 50% of the
assets or earning power of the Company and the Subsidiaries (taken as a
whole) to any Person or Persons,
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<PAGE> 17
then, and in each such case, proper provision shall be made so that (A)
except as provided below, each holder of a Right shall thereafter have
the right to receive, upon the exercise thereof in accordance with the
terms of this Agreement at an exercise price per Right equal to the
product of ten (10) times the then-current Purchase Price multiplied by
the number of Common Shares for which a Right was exercisable
immediately prior to the first occurrence of a Triggering Event, such
number of validly authorized and issued, fully paid, nonassessable and
freely tradeable Common Shares of such surviving, resulting or
acquiring Person (including the Company as the continuing or surviving
corporation of a transaction described in clause (ii) above), as the
case may be, free and clear of any liens, encumbrances and other
adverse claims and not subject to any rights of call or first refusal,
as shall be equal to the result obtained by (x) multiplying the product
of ten (10) times the then-current Purchase Price by the number of
Common Shares for which a Right was exercisable immediately prior to
the first occurrence of a Triggering Event and dividing that product by
(y) 50% of the current per share market price of the Common Shares of
such Person (determined pursuant to Section 11(e) hereof) on the date
of consummation of such Flip-over Event; (B) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of
the consummation of such Flip-over Event, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such issuer; and (D)
such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance
with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be possible, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights.
Notwithstanding the foregoing, if the surviving, resulting or acquiring
Person in any Flip-over Event, is not a corporation or business trust,
then, and in each such case, if such surviving, resulting or acquiring
Person is directly or indirectly wholly owned by a corporation or
business trust, then all references to Common Shares of such surviving,
resulting or acquiring Person in this Section 11(d) shall be deemed to
be references to the Common Shares of the corporation or business trust
which ultimately controls such Person, and if there is no such
corporation or business trust, (Y) proper provision shall be made so
that such surviving, resulting or acquiring Person shall create or
otherwise make available for purposes of the exercise of the Rights in
accordance with the terms of this Agreement, a type or types of
security or securities having a fair market value at least equal to the
economic value of the Common Shares which each holder of a Right would
have been entitled to receive if such surviving, resulting or acquiring
Person had been a corporation or a business trust; and (Z) all other
provisions of this Section 11(d) shall apply to the issuer of such
securities as if such securities were Common Shares. The Company shall
not consummate any Flip-over Event, unless the issuer of the Common
Shares or other securities, as the case may be, shall have a sufficient
number of authorized Common Shares or other securities which have not
been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 11(d) and unless prior to
such consummation the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement providing for
the terms set forth in this Section 11 and further providing that as
promptly as practicable after the consummation of any Flip-over Event,
the issuer shall:
(I) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
issuable upon exercise of the Rights on an appropriate form,
and shall 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
14
<PAGE> 18
prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date;
(II) take all such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky" laws
of the various states in connection with the exercisability of
the Rights; and
(III) deliver to holders of the Rights historical
financial statements for such issuer and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
Notwithstanding the foregoing, upon the occurrence of any Flip-over Event, any
Rights that are or were at any time beneficially owned by any Acquiring Person
or any Associate or Affiliate of such Acquiring Person (which Acquiring Person,
Associate or Affiliate is, directly or indirectly, causing such Flip-over Event
to occur) after the date upon which such Acquiring Person became such shall
become void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. The provisions of
this Section 11(d) shall similarly apply to successive mergers or consolidations
or sales or other transfers. In the event that a Flip-over Event occurs at any
time after the occurrence of a Flip-in Event, the Rights which have not
therefore been exercised shall thereafter become exercisable in the manner
described in this Section 11(d).
(e) For the purpose of any computation hereunder, the "current
per share market price" of Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; PROVIDED, HOWEVER, that in the event that the current per share
market price of the Common Shares is determined during a period following the
announcement by the issuer of such Common Shares (i) of a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (ii) any subdivision, combination or
reclassification of such Common Shares, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the "current market price" shall be appropriately adjusted to
take into account ex-dividend trading or to reflect the current market price per
Common Share equivalent. 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 the 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 prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") or such other system then in use, or, if on any such date the 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
15
<PAGE> 19
the Common Shares selected by the Directors of the Company. The term "Trading
Day" shall mean any day on which the principal national securities exchange on
which the Common Shares are listed or admitted to trading is open for the
transaction of business or, if the Common Shares are not listed or admitted to
trading on any national securities exchange, a Monday, Tuesday, Wednesday,
Thursday or Friday on which banking institutions in the State of New York are
not authorized or obligated by law or executive order to close. If the Common
Shares are not publicly held or not so listed or traded, or not the subject of
available bid and asked quotes, "current per share market price" shall mean the
fair value per share as determined in good faith by the Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(f) Except as set forth below, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price; PROVIDED, HOWEVER, that any adjustments
which by reason of this Section 11(f) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share as the case may be. Notwithstanding the first
sentence of this Section 11(f), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment and (ii) the Expiration Date.
(g) 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 shares
contained in this Section 11 and the provisions of Sections 7, 9, 10 and 14
hereof with respect to the Common Shares shall apply on like terms to any such
other shares.
(h) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(i) Unless the Company shall have exercised its election as
provided in Section 11(j) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares (calculated to the nearest ten-thousandth) obtained by (i) multiplying
(x) the number of shares covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(j) 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 the Rights outstanding
16
<PAGE> 20
after such adjustment of the number of Rights shall be exercisable for the
number of Common Shares for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 calendar days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(j), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(k) Irrespective of any adjustment or change in the Purchase
Price or the number or type of shares issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares which were expressed in
the initial Right Certificate issued hereunder.
(l) 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.
(m) 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 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.
(n) Anything in Sections 11 (a) through (m), inclusive, hereof
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
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<PAGE> 21
its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Common Shares, issuance wholly for cash of
any of the Common Shares at less than the current market price, issuance wholly
for cash of Common Shares or securities which by their terms are convertible
into or exchangeable for Common Shares, stock dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Common Shares shall not be taxable to such
shareholders.
(o) Notwithstanding any other provision of this Agreement, no
adjustment to the Purchase Price, the number of Common Shares (or fractions of a
share) for which a Right is exercisable or the number or Rights outstanding
shall be made or be effective if such adjustment would have the effect of
reducing or limiting the benefits the holders of the Rights would have had
absent such adjustment, including, without limitation, the benefits under
Sections 11(a)(ii) and 11(d) hereof, unless the terms of this Agreement are
amended so as to preserve such benefits.
Section 12. Certificate of Adjusted Purchase Price or
-----------------------------------------
Number of Shares.
- -----------------
Whenever an adjustment is made as provided in Section 11
hereof, the Company shall promptly prepare a certificate setting forth such
adjustment, (including a description of any Rights which have become void as a
result thereof), and a brief statement of the facts accounting for such
adjustment and promptly file with the Rights Agent and with each transfer agent
for the Common Shares a copy of such certificate. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be obligated or responsible for calculating any
adjustment nor shall it be deemed to have knowledge of such adjustment unless
and until it shall have received such certificate.
Section 13. Notice of Adjusted Purchase Price or Number or
----------------------------------------------
Type of Shares to Holders of Rights.
- ------------------------------------
Whenever an adjustment is made as provided in Section 11
hereof after the Distribution Date, the Company shall mail a brief summary of
such adjustment to each holder of a Right Certificate in accordance with Section
25 hereof.
Section 14. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid as promptly as practicable
to the registered holders of the Right 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 the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
18
<PAGE> 22
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Rights selected by the Directors of the Company. If on any such
date no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Directors of the Company
shall be used and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of
shares upon exercise of the Rights or to distribute certificates which evidence
fractional shares. Fractions of Common Shares may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of Common Shares. In lieu of fractional shares, the Company
may pay to the registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Common Share. For 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(e)
hereof) for the Trading Day immediately prior to the date of such exercise or
exchange.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise or exchange of a Right.
Section 15. Rights of Action.
-----------------
All rights of action in respect of this Agreement, excepting
the rights of action given to the Rights Agent under Section 18, are vested in
the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right 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 Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under this Agreement, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to this
Agreement.
19
<PAGE> 23
Section 16. Agreement of Rights 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 Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent designated for such purpose, 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 Right Certificate (or, prior to the Distribution Date,
the associated Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Share
certificate 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;
(d) Such holder expressly waives any right to receive
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14; and
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; PROVIDED, HOWEVER, that the Company shall use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
-------------------------------------
Shareholder.
- ------------
No holder, as such, of any Right Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the 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 Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof or exchanged pursuant to the provisions of Section 27 hereof.
20
<PAGE> 24
Section 18. Concerning the Rights Agent.
----------------------------
The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, suit, action, proceeding or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability. The costs and expenses of enforcing
this right of indemnification shall also be paid by the Company. The
indemnification provided for hereunder shall survive the expiration of the
Rights and the termination of this Agreement. The Rights Agent may conclusively
rely upon and shall be protected and shall incur no liability for or in respect
of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for 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. Notwithstanding
anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of the action.
Section 19. Merger or Consolidation or Change of Name of
--------------------------------------------
Rights Agent.
- -------------
Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any 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 Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so
21
<PAGE> 25
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
-----------------------
The Rights Agent undertakes the duties and obligations imposed
by this Agreement upon the following terms and conditions, and no implied duties
or obligations shall be read into this Agreement against the Rights Agent, by
all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, the
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature hereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 hereof (including any adjustment which results in
Rights becoming void) or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment or voidance); 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 Agreement or any Right
22
<PAGE> 26
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 Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than ten Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application subject to the proposed action or omission and/or specifying the
action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof. The Rights Agent shall not be
under any duty or responsibility to ensure compliance with any applicable
federal or state securities laws in connection with the issuance, transfer or
exchange of Right Certificates.
(j) The Rights Agent shall promptly remit to the Company any
funds paid to it upon exercise of the Rights pursuant to Section 7 hereof.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise, transfer, split up, combination or exchange,
either (i) the certificate attached to the
23
<PAGE> 27
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1 or 2
thereof, or (ii) any other actual or suspected irregularity exists, the Rights
Agent shall not take any further action with respect to such requested exercise,
transfer, split up, combination or exchange, without first consulting with the
Company, and will thereafter take further action with respect thereto only in
accordance with the Company's written instructions.
(l) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(m) The Rights Agent shall not be required to take notice or
be deemed to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation of
any Person as an Acquiring Person, Affiliate or Associate) under this Agreement
unless and until the Rights Agent shall be specifically notified in writing by
the Company of such fact, event or determination.
Section 21. Change of Rights Agent.
-----------------------
The Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of the Common Shares by
registered or certified mail, and, at the expense of the Company, to the holders
of the Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation or other legal entity organized and doing
business under the laws of the United States (or of any state of the United
States so long as such corporation is authorized to do business as a banking
institution in such state), in good standing, which is authorized under such
laws to exercise corporate trust powers or stock transfer powers and is subject
to supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million and which shall otherwise meet any requirements imposed by the
New York Stock Exchange on transfer agents and registrars. 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
24
<PAGE> 28
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 Right 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.
Section 22. Issuance of New Right Certificates.
-----------------------------------
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its 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 Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the Expiration Date, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant to
the exercise, exchange or conversion of securities (other than Rights) issued
prior to the Distribution Date which are exercisable for or exchangeable for, or
convertible into, Common Shares, and (b) may, in any other case, if deemed
necessary, appropriate or desirable by the Directors of the Company, issue Right
Certificates representing an equivalent number of Rights as would have been
issued in respect of such Common Shares if they had been issued or sold prior to
the Distribution Date, as appropriately adjusted as provided herein as if they
had been so issued or sold; provided, however, that (i) no such Right
Certificate shall be issued if, and to the extent that, in its good faith
judgment the Directors of the Company shall have determined that the issuance of
such Right Certificate could have a material adverse tax consequence to the
Company or to the Person to whom or which such Right Certificate otherwise would
be issued, and (ii) no such Right Certificate shall be issued if, and to the
extent that, appropriate adjustment otherwise shall have been made in lieu of
the issuance thereof.
Section 23. Redemption.
-----------
(a) Prior to the Expiration Date, the Directors of the Company
may, at their option, redeem all but not less than all of the then-outstanding
Rights at a redemption price of $.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (the "Redemption Price"), at any time prior to the close of
business on the Distribution Date.
(b) Immediately upon the effective date of the action of the
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, without interest thereon. Promptly after the
effectiveness of the redemption of the Rights, the Company shall publicly
announce such action and, within ten calendar days thereafter, will give notice
of such redemption to the holders of the then-outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
25
<PAGE> 29
registry books of the transfer agent for the Common Shares; PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect the
validity of the redemption of the Rights. 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. The Company may, at its option,
pay the Redemption Price in cash, Common Shares (based upon the current per
share market price of the Common Shares (determined pursuant to Section 11(e)
hereof) at the time of redemption) or any other form of consideration deemed
appropriate by the Directors of the Company (based upon the fair market value of
such other consideration, determined by the Directors of the Company in good
faith) or any combination thereof. The Company may, at its option, combine the
payment of the Redemption Price with any other payment being made concurrently
to holders of Common Shares and, to the extent that any such other payment is
discretionary, may reduce the amount thereof on account of the concurrent
payment of the Redemption Price. If legal or contractual restrictions prevent
the Company from paying the Redemption Price (in the form of consideration
deemed appropriate by the Directors) at the time of redemption, the Company
shall pay the Redemption Price, without interest, promptly after such time as
the Company ceases to be so prevented from paying the Redemption Price.
(c) At any time, the Directors of the Company may relinquish
their rights to redeem the Rights under paragraphs (a) or (b) above, or both, by
duly adopting a resolution to that effect. Immediately upon adoption of such
resolution, the rights of the Directors under the portions of this Section 23
specified in such resolution shall terminate without further action and without
any notice.
(d) Notwithstanding the foregoing, it is understood that no
later than five years from the date of this Agreement (or sooner than that if
any Person shall have made a proposal to the Company, or taken any such other
action, that, if effective, could cause such Person to become an Acquiring
Person hereunder), the Board of Directors of the Company shall review and
evaluate this Agreement in order to consider whether the maintenance of this
Agreement continues to be in the interests of the Company, its shareholders and
any other relevant constituencies of the Company.
Section 24. Notice of Certain Events.
-------------------------
In case, after the Distribution Date, the Company shall
propose (a) to pay any dividend payable in stock of any class to the holders of
Common Shares or to make any other distribution to the holders of Common Shares
(other than a regular periodic cash dividend at a rate not in excess of 125% of
the rate of the last cash dividend theretofore paid) or (b) to offer to the
holders of Common Shares rights, options or warrants to subscribe for or to
purchase any additional Common Shares or shares of stock of any class or any
other securities, rights or options, or (c) to effect any reclassification of
its Common Shares (other than a reclassification involving only the subdivision
of outstanding Common Shares), or (d) 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 more than 50% of the assets or earning power of the Company and
its Subsidiaries, taken as a whole, to any other Person or Persons, or (e) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right Certificate,
26
<PAGE> 30
in accordance with Section 25 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend,
distribution or offering of rights, options or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of the Common Shares, if any such date is to be fixed, and such
notice shall be so given, in the case of any action covered by clause (a) or (b)
above, at least 20 calendar days prior to the record date for determining
holders of the Common Shares for purposes of such action, and, in the case of
any such other action, at least 20 calendar days prior to the date of the taking
of such proposed action or the date of participation therein by the holders of
the Common Shares, whichever shall be the earlier.
In case any Triggering Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights.
Section 25. Notices.
--------
Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right 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:
RPM, Inc.
2628 Pearl Road
P.O. Box 777
Medina, Ohio 44258
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by registered or certified mail and shall be deemed given
upon receipt, addressed (until another address is filed in writing with the
Company) as follows:
Harris Trust and Savings Bank
600 Superior Avenue East
Suite 600
Cleveland, Ohio 44114
Attention: Laura Kochis
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate
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 Rights Agent.
27
<PAGE> 31
Section 26. Supplements and Amendments.
---------------------------
Prior to the Distribution Date and subject to Section 11 and
the last sentence of this Section 26, if the Company so directs, the Company and
the Rights Agent shall, at the expense of the Company, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing Common Shares. From and after the Distribution Date and subject to
the last sentence of this Section 26, if the Company so directs, the Company and
the Rights Agent shall supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to supplement or amend the provisions hereunder
in any manner which the Company may deem desirable, including, without
limitation, the addition of other events requiring adjustment to the Rights
under Sections 11(a)(ii) or 11(d) hereof or procedures relating to the
redemption of the Rights, which supplement or amendment shall not, in the good
faith determination of the Directors of the Company, adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment; PROVIDED, HOWEVER, that
the failure or refusal of the Rights Agent to execute such supplement or
amendment shall not affect the validity of any supplement or amendment adopted
by the Company, any of which shall be effective in accordance with the terms
thereof, PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to
the contrary, no supplement or amendment that changes the rights and duties of
the Rights Agent under this Agreement will be effective against the Rights Agent
without the execution of such supplement or amendment by the Rights Agent.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment shall be made which (x) changes the stated Redemption Price, (y)
reduces the number of Common Shares for which a Right is then exercisable, or
(z) modifies a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable.
Section 27. Exchange.
--------
(a) The Directors of the Company may, at their option, at any
time after the Distribution Date, 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 (or a lesser ratio as determined by the Board
of Directors, if the Company does not have sufficient authorized and unreserved
Common Shares) 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 Directors shall not be empowered to effect
such exchange at any time after any Person (other than the Company, any
Subsidiary, any employee benefit plan of the Company or any Subsidiary, or any
entity holding Common Shares for or pursuant to the terms of any such plan), who
or which, together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Shares outstanding.
28
<PAGE> 32
(b) Immediately upon the effective date of the action of the
Directors of the Company ordering the exchange of any Rights pursuant to Section
27(a) hereof, and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right with respect to such
Rights thereafter of the 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. Promptly after the action of the Directors of
the Company ordering the exchange of any Rights pursuant to Section 27(a)
hereof, the Company shall publicly announce such action, and within 10 calendar
days thereafter shall give notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange shall 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 of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the Company,
at its option, may substitute for any Common Share exchangeable for a Right, (i)
cash, (ii) debt securities of the company, (iii) other assets, or (iv) any
combination of the foregoing, in any event having an aggregate value which the
Directors of the Company shall have determined in good faith to be equal to the
current market value of one Common Share (determined pursuant to Section 11(e)
hereof) on the Trading Day immediately preceding the date of exchange pursuant
to this Section 27.
Section 28. Successors.
-----------
All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement.
---------------------------
Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares)
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (or prior to the
Distribution Date, the Common Shares).
Section 30. Action by Directors.
--------------------
Whenever any action hereunder or in connection with the Rights
is required or permitted to be taken by the Directors of the Company, such
action may be taken by the Executive Committee of the Directors or by any other
duly authorized committee thereof.
29
<PAGE> 33
Section 31. Severability.
-------------
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; PROVIDED,
HOWEVER, that nothing contained in this Section 31 shall affect the ability of
the Company under the provisions of Section 26 to supplement or amend this
Agreement to replace such invalid, void or unenforceable term, provision,
covenant or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.
Section 32. Governing Law.
--------------
This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Ohio and
for all purposes shall be governed by and construed in accordance with the laws
of such State applicable to contracts to be made and performed entirely within
such State.
Section 33. Counterparts.
-------------
This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
Section 34. Descriptive Headings.
---------------------
Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
30
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, effective as of the 28th day of April, 1999.
RPM, INC.
By: /s/ Thomas C. Sullivan
-------------------------------
Name: Thomas C. Sullivan
Title: Chairman
HARRIS TRUST AND SAVINGS BANK, as Rights
Agent
By: /s/ Michael J. Lang
-------------------------------
Name: Michael J. Lang
Title: Vice President
31
<PAGE> 35
Exhibit A
FORM OF RIGHT CERTIFICATE
Certificate No. R- ____________Rights
NOT EXERCISABLE AFTER MAY 11, 2009 OR EARLIER IF REDEEMED OR EXCHANGED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO IS OR WAS AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
11(a)(ii) OR SECTION 11(d) OF THE RIGHTS AGREEMENT.*]
Right Certificate
RPM, 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 April 28, 1999, (the "Rights Agreement"),
between RPM, Inc., an Ohio corporation (the "Company"), and Harris Trust and
Savings Bank, an Illinois banking corporation (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Agreement) and prior to 5:00 P.M. (Cleveland, Ohio time) on May
11, 2009 at the principal office of the Rights Agent, or its successors as
Rights Agent, at its principal executive offices designated for such purpose,
one-tenth of one fully paid nonassessable Common Share, without par value (a
"Common Share") of the Company, at a purchase price of $70.00 per whole Common
Share (the "Purchase Price"), upon representation and surrender of this Right
Certificate with the Form of Election to purchase and related Certificate duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
the Record Date, based on the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of Common Shares which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a
- -------------------
* The portion of the legend in brackets shall be inserted only if applicable.
A-1
<PAGE> 36
full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent.
Pursuant to the Rights Agreement, from and after the time that any
Person becomes an Acquiring Person (as such terms are defined in the Rights
Agreement), (i) any Rights that are or were beneficially owned by any Acquiring
Person (or any Affiliate or Associate 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 the Rights Agreement, (ii) no Right Certificate
shall be issued pursuant to the Rights Agreement that represents Rights
beneficially owned by an Acquiring Person or any Affiliate or Associate thereof,
(iii) no Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person or any Affiliate or Associate thereof, and (iv)
any Right Certificate delivered to the Rights Agent for transfer to an Acquiring
Person or any Affiliate or Associate thereof shall be cancelled.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Common Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.001 per Right.
Subject to the provisions of the Rights Agreement, the Directors of the
Company may exchange the Rights (other than any Rights which have become void),
in whole or in part, at an exchange ratio of one Common Share per Right (subject
to adjustment).
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Shares
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 shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
A-2
<PAGE> 37
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _________, ____.
ATTEST: RPM, INC.
________________________ By: _______________________________
Secretary Name:
Title:
Countersigned:
By:_____________________
Authorized Signature
A-3
<PAGE> 38
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
---------------------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, __________________________ hereby sells,
assigns and transfers unto _____________________________________________________
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
- --------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ___________________, ____
---------------------------
Signature
Signature Guaranteed:
A-4
<PAGE> 39
CERTIFICATE
-------------------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being sold, assigned, transferred, split up, combined or exchanged by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________________, ____
---------------------------------
Signature
A-5
<PAGE> 40
FORM OF ELECTION TO PURCHASE
-------------------------------------------------
(To be executed if holder desires to
exercise the Right Certificate)
To RPM, Inc.:
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to purchase the
one-tenth of a Common Share or other securities issuable upon the exercise of
such Rights and requests that certificates for such securities be issued in the
name of:
Please insert social security
or other identifying number:_________________________________
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:_________________________________
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated: ___________________, ____
----------------------------------
Signature
Signature Guaranteed:
A-6
<PAGE> 41
CERTIFICATE
-------------------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________________, ____
-----------------------------------
Signature
NOTICE
-----------
SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF
ELECTION TO PURCHASE AND IN THE RELATED CERTIFICATES MUST CORRESPOND TO THE NAME
AS WRITTEN UPON THE FACE OF THIS RIGHT CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE PROGRAM) PURSUANT TO
RULE 17AD-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
A-7
<PAGE> 42
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On April 28, 1999, the Directors of RPM, Inc. (the "Company")
declared a dividend distribution of one right (a "Right") for each outstanding
Common Share, without par value (the "Common Shares"), of the Company. The
distribution was payable on May 11, 1999 (the "Record Date") to the shareholders
of record as of the close of business on the Record Date. Each Right entitles
the registered holder to purchase from the Company one-tenth of a Common Share
at a price of $70.00 per whole share, subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are set forth in a Rights
Agreement dated as of April 28, 1999, (the "Rights Agreement"), between the
Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights Agent").
Until the earliest to occur of (i) the close of business on
the tenth business day following a public announcement that a person or group of
affiliated or associated persons has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding Common Shares (an
"Acquiring Person"), or (ii) the close of business on the tenth business day (or
such later date as may be specified by the Directors) following the commencement
of a tender offer or exchange offer by a person or group of affiliated or
associated persons, the consummation of which would result in beneficial
ownership by such person or group of 15% or more of the outstanding Common
Shares (the earliest of such dates being hereinafter called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificates.
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, exchange or expiration of the
Rights) or, in the case of Common Shares issued upon conversion of the Company's
convertible securities, until the tenth day after the Distribution Date, 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,
exchange or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares in respect of which Rights have been issued 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 (the "Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on May 11, 2009 (the "Final Expiration Date"), unless
earlier redeemed or exchanged by the Company as described below.
The Purchase Price payable, and the number of Common Shares or
other property issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent
B-1
<PAGE> 43
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Common Shares; (ii) upon the grant to holders of the
Common Shares of certain rights, options or warrants to subscribe for Common
Shares or convertible securities at less than the current market price of the
Common Shares; or (iii) upon the distribution to holders of the Common Shares of
evidences of indebtedness, cash (excluding regular periodic cash dividends at a
rate not in excess of 125% of the rate of the last cash dividend theretofore
paid), assets, stock (other than dividends payable in Common Shares) or of
subscription rights, options or warrants (other than those referred to above).
In the event (a "Flip-in Event"), that any person or group or
affiliate or associated persons becomes an Acquiring Person, proper provision
shall be made so that each holder of a Right, other than Rights that are or were
owned beneficially by the Acquiring Person (which, from and after the date of
the earliest of any such event, will be void), will thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price, that number
of Common Shares having a market value of two times the Purchase Price.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares will be issued (other than
fractions which may, at the election of the Company, be evidenced by depositary
receipts), and in lieu thereof, a payment in cash will be made based on the
market price of the Common Shares on the last trading day prior to the date of
exercise.
In the event (a "Flip-over Event") that, following the first
date of public announcement that a person has become an Acquiring Person, (i)
the Company merges with or into any person and the Company is not the surviving
corporation, (ii) any person merges with or into the Company and the Company is
the surviving corporation, but its Common Shares are changed or exchanged, or
(iii) 50% or more of the Company's assets or earning power, including without
limitation securities creating obligations of the Company, are sold, proper
provision shall be made so that each holder of a Right, other than Rights that
are or were beneficially owned by the Acquiring Person after the date upon which
the Acquiring Person became such (which will thereafter be void), shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of Common Shares (or, under
certain circumstances, an economically equivalent security or securities) of
such other person which at the time of such transaction would have a market
value of two times the Purchase Price of the Right.
At any time after the Distribution Date, the Directors of the
Company may exchange the Rights (other than any Rights which have become void),
in whole or in part, at an exchange ratio of one Common Share (or a lesser ratio
as determined by the Board of Directors if the Company does not have sufficient
authorized and unreserved Common Shares) per Right (subject to adjustment).
The Company may redeem the Rights in whole, but not in part,
at a price of $.001 per Right (the "Redemption Price"), at any time prior to the
close of business on the Distribution Date. Immediately upon the effective date
of action of the Directors electing to redeem 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. The Company will give notice of such redemption to
the
B-2
<PAGE> 44
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear on the registry books of the
Rights Agent.
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.
The Rights Agreement may be amended by the Company without the
approval of any holders of Rights, including amendments which add other events
requiring adjustment to the Purchase Price payable and the number of Common
Shares or other securities issuable upon the exercise of the Rights or which
modify procedures relating to the redemption of the Rights, provided that no
amendment may be made which (i) changes the stated Redemption Price, (ii)
reduces the number of Common Shares for which a Right is then exercisable, or
(iii) modifies a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Form 8-A dated May 11,
1999. 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.
B-3
<PAGE> 1
Exhibit 99.1
[RPM LOGO]
May 12, 1999
To Our Shareholders:
As announced on April 28, 1999, RPM, Inc. has adopted a shareholder rights
plan. Shareholder rights plans are a well accepted approach to ensure that all
shareholders are treated equally in the event of a takeover. With our industry
sector and RPM trading at historically low valuation multiples, the rights plan
helps assure our investors that a potential acquiror would negotiate with the
Board and pay a fair price for RPM stock.
RPM's plan was adopted after careful study. RPM's plan will not affect our
reported financial condition or results of operations (including earnings per
share), will not change the way RPM's Common Shares are currently traded and is
not a taxable event. The plan was not adopted in response to any pending or
proposed change in control of RPM.
This plan is intended to protect the Company and its shareholders from
potentially coercive takeover practices or takeover bids which are inconsistent
with the interests of the Company and its shareholders. The plan is not intended
to deter unsolicited offers that would provide superior long-term value to all
of the Company's shareholders. The adoption of a shareholder rights plan has
become common practice in major American publicly owned companies and a
well-accepted approach to ensuring that all shareholders receive a fair value
and are treated equally in the event of a takeover.
If someone acquires 15% of our stock and triggers the plan, RPM
shareholders, other than the acquiror, will have the right to buy stock of RPM
at a discount. The plan also contains a provision which in certain circumstances
gives RPM shareholders the right to buy shares of the acquiring company at a
discount. The surviving corporation to any merger is obligated to honor the
rights and sell its shares at the discounted price.
The Board will examine the merits of retaining the rights plan five years
from its date of adoption and at the time of its expiration on May 11, 2009. It
is also important to note that RPM's plan does not contain a so-called "dead
hand" provision which some institutional shareholders have found objectionable.
"Dead hand" generally refers to restrictions imposed by the terms of a rights
plan on the power of a newly-elected board of directors.
The shareholder rights plan is described in greater detail in the attached
"Summary of Rights to Purchase Common Shares." I urge you to review the summary
and to retain it with your permanent records.
In adopting the shareholder rights plan, the Board has expressed its
confidence in RPM's future and its determination that all shareholders be given
every opportunity to participate fully in that future.
On Behalf of the Board of Directors,
/s/ Thomas C. Sullivan
Thomas C. Sullivan
Chairman and Chief Executive Officer
<PAGE> 1
Exhibit 99.2
News Release
[logo]RPM RPM, INC.- P.O. Box 777 - Medina, Ohio 44258 - 330-273-5090 - Fax
330-225-8743 - http://www.rpminc.com
- ---------------------------------------------------------------------------
RPM, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
MEDINA,OH - April 28, 1999 - RPM, Inc. (NYSE:RPM) announced today that
its Board of Directors has adopted a Shareholder Rights Plan. Under the Plan,
the RPM Board declared a dividend distribution of one right for each outstanding
RPM Common Share, payable May 11, 1999. Each right entitles the registered
holder to purchase from RPM one-tenth of a Common Share at a price of $7.00 or
$70.00 per whole share, subject to adjustment.
"RPM's Board adopted the Shareholder Rights Plan to ensure the
protection of shareholders against a partial tender offer or share accumulation
that might allow a third party to take control of RPM without paying all
shareholders a fair price for their shares," said Thomas C. Sullivan, chairman
and chief executive officer of the specialty coatings company. He added that the
Plan does not contain the so-called "dead hand" provision which some
institutional shareholders have found to be objectionable.
The rights will initially trade together with RPM's Common Shares and
will not be exercisable. In the absence of further RPM Board action, the rights
generally will become exercisable and allow the holder to acquire RPM Common
Shares at a discounted price if a person or group acquires 15% or more of RPM's
outstanding Common Shares. Rights held by persons who exceed the applicable
threshold will be void. Under certain circumstances, the rights will entitle the
holder to buy shares in an acquiring entity at a discounted price
The company's Board of Directors may, at its option, redeem all rights
for $.001 per right, generally at any time prior to the rights becoming
exercisable. The rights will expire May 11, 2009, unless earlier redeemed,
exchanged or amended by the Board of Directors, and the Plan specifically
provides that the Board will review the status of the Plan at the end of five
years to determine if any such action should be taken.
"The adoption of shareholder rights plans has become common practice in
major American companies and a well-accepted approach to ensuring that all
shareholders receive a fair price and are treated equally in the event of a
takeover," said Sullivan. "With our industry sector and the company trading at
historically low multiples, the rights plan helps assure our investors that a
corporate raider would negotiate with the Board and pay a fair price for RPM
stock."
Mr. Sullivan said the adoption of the Plan was not taken in response to
or in anticipation of any specific or proposed change in control of RPM.
The issuance of the rights is not a taxable event, will not affect
RPM's reported financial condition or results of operations (including earnings
per share) and will not change the way in which RPM's Common Shares are
currently traded.
RPM, Inc. is a world leader in specially coatings, serving both the
industrial and consumer markets. Its industrial products include roofing
systems, sealants, corrosion control coatings, floor coatings and specialty
coatings and chemicals. RPM's consumer do-it-yourself products are used for home
maintenance and automotive and boat repair. Traded on the New York Stock
Exchange under the symbol RPM, the company has announced that it expects its
fiscal year ending May 31, 1999 to be RPM's 52nd consecutive year of record
sales and record earnings.
