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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 6, 1996
BOWMAR INSTRUMENT CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 1-4817 35-0905052
(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) identification No.)
Incorporation)
5080 North 40th Street, Phoenix, Arizona 85018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602 957-0271)
(Former name or former address, if change since last report)
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ITEM 5. OTHER EVENTS
Exhibit 5 (a) - Press release dated December 9, 1996 attached hereto.
Exhibit 5 (b) - Shareholder Rights Agreement dated December 6, 1996 attached
hereto.
Exhibit 5 (c) - Letter to Shareholders dated December 16, 1996 attached hereto.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
BOWMAR INSTRUMENT CORPORATION
By: /s/ Joseph G. Warren, Jr.
----------------------------
Joseph G. Warren, Jr.
Vice President Finance
DATED: December 18, 1996
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For: Bowmar Instrument Corporation EXHIBIT 5(a)
5080 North 40th Street, Suite 475
Phoenix, Arizona 85018
Contact: Joseph G. Warren, Jr.
Bowmar Instrument Corporation
(602) 957-0271
BOWMAR INSTRUMENT CORPORATION
ANNOUNCES SHAREHOLDER RIGHTS
PLAN AND ANNOUNCES DIVIDEND OF PURCHASE RIGHTS
PHOENIX, ARIZONA--DECEMBER 9, 1996
Bowmar Instrument Corporation (ASE:BOM) announced today that its Board of
Directors has adopted a Shareholders Rights Plan and has declared a dividend of
one Right on each outstanding share of the Company's common stock to
shareholders of record on December 16, 1996. The Plan is designed to ensure the
fair treatment of shareholders in connection with any potential takeover of the
Company and to guard against partial tender offers, open market accumulations
and other abusive tactics to gain control of the Company. Thomas K. Lanin,
President and Chief Executive Officer of Bowmar Instrument Corporation stated:
"The actions announced today underscore our belief that the true value of the
Company is not reflected in the current price of the Company's stock and that
steps should be taken to enable our shareholders to realize the long-term value
of their investment in the Company."
The Shareholder Rights Plan, which is similar to plans adopted by many
other U.S. companies, strengthens the ability of the Board to assure that
Bowmar's shareholders receive fair and equal treatment, and to protect the
interest of Bowmar's shareholders, in the event of an unsolicited offer to
acquire control of the Company. However, it will encourage any potential
acquirer to negotiate the manner and terms of any proposed acquisition with the
Board of Directors.
The Rights will be exercisable if a person or group acquires 15% or more
of the Company's common stock or announces or commences a tender offer for 15%
or more of the such shares. When a person or group acquires such 15%, each
exercisable Right will entitle its holder (other than such person or group) to
purchase, at the Right's then-current exercise price, a number of the Company's
common shares having a market value of twice
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such price. In addition, if the Company is acquired in a merger or other
business combination transaction after a person has acquired 15% or more of the
Company's outstanding common stock, each right will entitle its holder to
purchase, at the Right's then-current exercise price, a number of the acquiring
company's common stock having a market value of twice such price.
Prior to the acquisition by a person or group of beneficial ownership of
15% or more of the Company's common stock, the Rights are redeemable for one
cent per Right at the option of the Board of Directors.
The Rights will expire on December 5, 2006 unless otherwise extended by
the Board of Directors. The Rights distribution is not taxable to shareholders.
Bowmar, which is headquartered in Phoenix, Arizona, manufactures and sells
microelectronic and electromechanical products with specific applications in the
aerospace, electronic, and computer industries. The Company's manufacturing
facilities are located in Fort Wayne, Indiana and Phoenix, Arizona.
# # #
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EXHIBIT 5 (b)
BOWMAR INSTRUMENT CORPORATION
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF DECEMBER 6, 1996
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TABLE OF CONTENTS
Page
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SECTION 1 Certain Definitions..............................................1
SECTION 2 Appointment of Rights Agent......................................7
SECTION 3 Issue of Right Certificates......................................7
SECTION 4 Form of Right Certificates.......................................9
SECTION 5 Countersignature and Registration...............................10
SECTION 6 Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates....................................................11
SECTION 7 Exercise of Rights; Purchase Price; Expiration Date of Rights...12
SECTION 8 Cancellation and Destruction of Right Certificates..............14
SECTION 9 Availability of Common Shares...................................15
SECTION 10 Common Shares Record Date.......................................17
SECTION 11 Adjustment of Purchase Price, Number of Shares or Number of
Rights..........................................................17
SECTION 12 Certificate of Adjusted Purchase Price or Number of Shares......29
SECTION 13 Consolidation, Merger or Sale or Transfer of Assets or Earning
Power...........................................................30
SECTION 14 Fractional Rights and Fractional Shares.........................35
SECTION 15 Rights of Action................................................36
SECTION 16 Agreement of Right Holders......................................37
SECTION 17 Right Certificate Holder Not Deemed a Shareholder...............38
SECTION 18 Concerning the Rights Agent.....................................38
SECTION 19 Merger or Consolidation or Change of Name of Rights Agent.......39
SECTION 20 Duties of Rights Agent..........................................40
SECTION 21 Change of Rights Agent..........................................44
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SECTION 22 Issuance of New Right Certificates..............................46
SECTION 23 Redemption......................................................46
SECTION 24 Exchange........................................................48
SECTION 25 Notice of Certain Events........................................50
SECTION 26 Notices.........................................................52
SECTION 27 Supplements and Amendments......................................53
SECTION 28 Successors......................................................54
SECTION 29 Benefits of this Agreement......................................54
SECTION 30 Severability....................................................54
SECTION 31 Governing Law...................................................55
SECTION 32 Counterparts....................................................55
SECTION 33 Descriptive Headings............................................55
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RIGHTS AGREEMENT
This Agreement, dated as of December 6, 1996, between Bowmar Instrument
Corporation, an Indiana corporation (the "Corporation"), and American Stock
Transfer and Trust Company (the "Rights Agent") is entered into between the
Corporation and the Rights Agent.
WHEREAS, The Board of Directors of the Corporation has authorized and
declared a dividend of one common share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Corporation outstanding and held of
record as of the Close of Business (as hereinafter defined) on December 16, 1996
(the "Record Date"), each Right representing the right to purchase one share of
Common Stock, no par value, of the Corporation upon the terms and subject to the
conditions herein set forth, and has further authorized the issuance of one
Right with respect to each Common Share that shall become outstanding between
the Record Date and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
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(a) "Acquiring Person" shall mean any Person (other than any Exempt
Person), who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, is the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the Common Shares then
outstanding; provided, however, that the term "Acquiring Person" shall not
include a Person (i) who is the Beneficial Owner of 15% or more of the Common
Shares then outstanding solely as a result of a reduction in the number of
Common Shares outstanding, unless subsequent to such reduction such Person or
any Affiliate or Associate of such Person shall become the Beneficial Owner of
any additional Common Shares other than as a result of a result of a stock
dividend, stock split or similar transaction effected by the Corporation in
which all shareholders are treated equally or (ii) who is the Beneficial Owner
of 15% or more of the Common Shares then outstanding but who acquired Beneficial
Ownership of Common Shares without any plan or intention to seek control of the
Corporation, if such Person promptly enters into a firm commitment to divest,
and thereafter promptly divests (without exercising or retaining any power,
including voting, with respect to such Shares), sufficient Common Shares (or
securities convertible into or exercisable for Common Shares) so that such
Person ceases to be the Beneficial Owner of 15% or more of the then outstanding
Common Shares or Mr. Edward A. White or any other Person who becomes a
Beneficial Owner of the Common Shares owned by Mr. White by will or by the laws
of descent and distribution or any other Person who acquires such a Beneficial
Interest in a similar fashion but any Person acquiring such a Beneficial
Interest in any other fashion shall be deemed an Acquiring Person if such
Beneficial Interest equals or exceeds 15% of the Common Shares then outstanding.
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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 of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly,
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;
or (B) the right to vote or dispose of pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote
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such security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Corporation; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security 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.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Corporation, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
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(d) "Business Day" shall mean any day other than a Saturday, a Sunday, or
a day on which banking institutions in the States of Arizona or New York are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., eastern
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., eastern time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Corporation shall mean
the shares of common stock, without par value, of the Corporation; provided,
however, that if the Corporation is the continuing or surviving corporation in a
transaction described in Section 11(a)(ii) or Section 13 hereof, "Common Shares"
when used with reference to the "Corporation" shall mean the capital stock or
equity security with the greatest aggregate voting power of the Corporation.
"Common Shares" when used with reference to any Person other than the
Corporation (including an Issuer as defined in Section 13 hereof) shall mean the
capital stock or equity security with the greatest voting power of such other
Person.
(g) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth calendar day after a Share Acquisition Date or (ii) the
Close of Business on the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than any Exempt Person) or of the first public announcement of the
intention of any Person (other than any Exempt Person) to commence a
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tender or exchange offer, the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 15% or more of the
then outstanding Common Shares (including any such date which is after the date
of this Agreement and prior to the issuance of the Rights).
(h) "Exempt Person" shall mean (i) the Corporation or any Subsidiary of
the Corporation, (ii) any employee benefit or stock ownership plan of the
Corporation or any entity holding Common Shares for or pursuant to the terms of
any such plan, or (iii) any Person who acquires Common Shares from any other
Exempt Person in one or a series of related transactions, each of which is
approved by the Board of Directors; provided, however, that if any Person who
becomes an Exempt Person solely by virtue of subsection (iii) above, or any
Affiliate or Associate of such Person, subsequently becomes the Beneficial Owner
of any additional Common Shares in a transaction or transactions not approved by
the Board of Directors, such Person shall no longer be deemed an "Exempt Person"
with respect to all Common Shares of which it, or any of its Affiliates or
Associates, is the Beneficial Owner.
(i) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, limited liability partnership or other entity, and
shall include any successor (by merger or otherwise) of any such entity.
(j) "Share Acquisition Date" shall mean the first date of public
announcement by the Corporation or an Acquiring Person that an Acquiring Person
has become such.
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(k) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Corporation hereby appoints
the Rights Agent to act as agent for the Corporation and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates, as hereinafter defined) and not by separate
Right Certificates, and (ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Corporation will prepare and
execute, the Rights Agent will countersign, and the Corporation will send or
cause to be sent (and the Rights Agent will, if requested, send) by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Corporation, a Right Certificate, in substantially
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the form of Exhibit A hereto (a "Right Certificate"), evidencing one Right for
each Common Share so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Corporation will send a copy of a Summary of Rights to Purchase Common Shares,
in substantially the form of Exhibit B hereto (the "Summary of Rights"), by
first class, postage prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Record Date at the address of such holder shown on
the records of the Corporation. 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 registered in the names of the holders thereof
together with a copy of the Summary of Rights. Until the Distribution Date (or
the earlier of the Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding as of the Record
Date, with or without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
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This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Bowmar
Instrument Corporation and American Stock Transfer and Trust
Company, Rights Agent, dated as of December 6, 1996 ("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 Bowmar Instrument Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Bowmar Instrument Corporation will
mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. As described in the Rights Agreement, Rights issued to or
acquired by any Person who becomes an Acquiring Person (as defined
in the Rights Agreement) shall become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby, in
the event that the Corporation purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Corporation shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Common Shares and of assignment to be printed on
the reverse thereof) may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Corporation may
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any
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applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 22
hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of Common Shares as shall be set forth therein at the price per
Common Share set forth therein (the "Purchase Price"), but the number of such
Common Shares and the Purchase Price shall be subject to adjustment as provided
herein.
Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Corporation by its Chairman of the Board, its
President, any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Corporation's seal or a
facsimile thereof, and shall be attested by the Secretary or any Assistant
Secretary of the Corporation, either manually or by facsimile signature. The
Right Certificates shall be manually or by facsimile countersigned by the Rights
Agent and shall not be valid for any purpose unless countersigned. In case any
officer of the Corporation shall have signed any of the Right Certificates shall
cease to be such officer of the Corporation before countersignature by the
Rights Agent and issuance and delivery by the Corporation, such Right
Certificates, nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Corporation with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such officer of
the Corporation; and any Right Certificate may be signed on behalf of he
Corporation by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Corporation to
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sign such Right Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, as its principal office, 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 Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of Common Shares as
the Right Certificate or Right Certificates surrendered then entitled each
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.
Thereupon the Rights Agent shall countersign and deliver to the person entitled
thereto a Right
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Certificate or Right Certificates, as the case may be, as so requested. The
Corporation 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 Corporation and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Corporation's request,
reimbursement to the Corporation 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 Corporation will make and deliver a new
Right Certificate of like tenor to the Rights Agency for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) 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 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 office of the Rights Agent designated for such
purpose, together with payment of the Purchase Price for each Common Share as to
which the Rights are exercised, at or prior to the earliest of (i) the Close of
Business on December 5, 2006 (the "Final Expiration Date"), (ii) the time at
which the Rights
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are redeemed as provided in Section 23 hereof (the "Redemption Date"), or (iii)
the time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each Common Share pursuant to the exercise of a
Right shall initially be $20.00 and shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Corporation, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of the
Common Shares certificates for the number of Common Shares to be purchased and
the Corporation hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) requisition from the depositary agent depositary
receipts representing such number of Common Shares as are to be purchased (in
which case certificates for the Common Shares represented by such receipts shall
be deposited by the transfer agent with the depositary agent) and the
Corporation hereby directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Corporation the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
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holder of such Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after receipt, deliver
such cash to or upon the order of the registered holder of 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.
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 Corporation or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Corporation 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
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Corporation, or shall, at the
written request of the Corporation, provide the Corporation with a copy thereof
and destroy such canceled Right Certificates, and deliver a certificate of
destruction thereof to the Corporation.
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Section 9. Availability of Common Shares.
(a) If the Common Shares issuable and deliverable upon the exercise of
Rights are listed on any national securities exchange, the Corporation shall use
its reasonable best efforts to cause, from and after such time as the Rights
become exercisable, all Common Shares reserved for issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(b) The Corporation shall use its reasonable best efforts to (i) file, as
soon as practicable following the later to occur of an event described in
Section 11(a)(ii) or Section 13 hereof or the Distribution Date, a registration
statement under the Securities Act of 1933, as amended (the "Act"), with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earliest of (A) the date as of which the Rights are no longer
exercisable for such securities, (B) the Final Expiration Date and (C) the
Redemption Date. The Corporation will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights;
provided, however, that the Corporation may temporarily suspend the
exercisability of the Rights to prepare and file such registration statement and
permit it to become effective, and upon any such suspension, the Corporation
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
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is no longer in effect. Notwithstanding any such provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained.
(c) The Corporation covenants and agrees that it will take all such action
as may be necessary to ensure that all Common Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Common Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(d) The Corporation 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 Corporation 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 or depositary receipts for the Common
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts 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 Corporation's reasonable satisfaction that no such
tax is due.
Section 10. Common Shares Record Date. Each person is whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be
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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 Corporation are closed, such person shall be deemed
to have become the record holder on such succeeding Business Day on which the
Common Shares transfer books of the Corporation 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 holder of Common 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 Corporation,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Common Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a)(i)In the event the Corporation 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 Common 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 Corporation is the continuing or
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surviving corporation), except as otherwise provided in this Section 1
l(a), the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when
the Common Shares transfer books of the Corporation were open, he would
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value, if any, of the
shares of capital stock of the Corporation issuable upon exercise of one
Right.
(ii) Subject to Section 24 of this Agreement, in the event that a
Share Acquisition Date shall occur at any time after the date of this
Agreement, then each holder of a Right shall thereafter have a right to
receive, upon exercise thereof in accordance with the terms of this
Agreement and in lieu of the number of Common Shares for which the Right
is then exercisable, such number of Common Shares of the Corporation as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of Common Shares for which a Right is then
exercisable and dividing that product by (y) 50% of the then current per
share market price of the Corporation's Common Shares (determined pursuant
to Section 11(d) hereof as of the date such Person became an Acquiring
Person). In the event that any Person shall
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become an Acquiring Person and the Rights shall then be outstanding, the
Corporation shall not take any action which would eliminate or diminish
the benefits intended to be afforded by the Rights.
From and after the occurrence of the event described above, any
Rights that are or were acquired or beneficially owned by such Acquiring
Person (or any Associate or Affiliate of such Acquiring Person) shall be
void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof;
no Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee
of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or
any Associate or Affiliate thereof shall be canceled.
(iii) In the event that there shall not be sufficient Common Shares
authorized and unissued to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Corporation shall
take all such action as may be necessary to authorize additional Common
Shares for issuance upon exercise of the Rights. However, if the
Corporation is unable to cause the authorization of additional
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Common Shares within 90 calendar days after the occurrence of an event in
Section 11(a)(ii), then, notwithstanding anything in this Agreement to the
contrary, the Corporation shall determine the excess of the value, as
determined by the Board of Directors in good faith, of the Common Shares
issuable upon the exercise of a Right over the Purchase Price (such excess
being hereinafter referred to as the "Spread") and shall be obligated to
deliver, upon the surrender of such Right and without requiring payment of
the Purchase Price, Common Shares (to the extent available) and cash (to
the extent permitted by applicable law and any agreements or instruments
to which the Corporation is a party in effect immediately prior to the
first occurrence of an event in Section 11(a)(ii)) in an amount equal to
the Spread. To the extent that any legal or contractual restrictions
prevent the Corporation from paying the full amount of cash payable in
accordance with the foregoing sentence, the Corporation shall pay to
holders of the Rights as to which such payments are payable all amounts
which are not then restricted on a pro rata basis and shall continue to
make payments on a pro rata basis as funds become available until the full
amount due to each such Right holder has been paid.
(b) In case the Corporation 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
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<PAGE> 24
share, if a security convertible into Common Shares or equivalent common shares)
less than the then current per share market price of the Common Shares (as
defined in Section 1 l(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of 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); provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value, if any, of the shares of capital stock of the
Corporation issuable upon exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent. Common Shares owned by or
held for the account of the Corporation 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.
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(c) In case the Corporation shall fix a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the then current per share market price of the Common Shares on
such record date less the fair market value (as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Common Share and the denominator of which shall be
such current per share market price of the Common Shares; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value, if any, of the shares of capital
stock of the Corporation to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d)(i)For the purpose of any computation hereunder, the "current per
share market price" of any Security (a "Security" for the purpose of this
Section 11(d)(i)
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<PAGE> 26
shall mean capital stock or equity security) on any date shall be deemed
to be the average of the daily closing prices per share of such Security
for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that
the current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior to
the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination of reclassification, then, and in each such case, the current
per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. 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 American Stock Exchange or, if the
Security is not listed or admitted to trading on the American Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading
or, if the Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or such other
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<PAGE> 27
system then in use, or, if on any such date the Security is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Corporation. The term "Trading
Day" shall mean a day on which the principal national securities exchange
on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day. :
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Common Shares shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Common Shares are
not publicly held or so listed or traded, "current per share market price"
shall mean the fair value per share as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a
Common Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the
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transaction which requires such adjustment or (ii) the date of the expiration of
the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 1l(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Corporation other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the Common
Shares contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 with respect to the Common Shares shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Corporation 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.
(h) Unless the Corporation shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Common Shares
(calculated to the nearest one ten-thousandth of a Common Share) obtained by (i)
multiplying (x) the number of Common Shares covered by a Right immediately
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prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Corporation 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 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 one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Corporation shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
1l(i), the Corporation 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 Corporation, shall cause to be distributed to such holders of
record in substitution and replacement for the Right Certificates
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held by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Corporation, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and countersigned in
the manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common Shares issuable
upon exercise of the Rights, the Corporation shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable Common
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Corporation may elect to defer until the occurrence of such event
issuing to the holder of any Right exercised after such record date the Common
Shares and other
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capital stock or securities of the Corporation, if any, issuable upon such
exercise over and above the Common Shares and other capital stock or securities
of the Corporation, if any, issuable on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Corporation shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Common Shares, issuance
wholly for cash or any Common Shares at less than the current market price,
issuance wholly for cash or Common Shares or securities which by their terms are
convertible into or exchangeable for Common Shares, dividends on Common Shares
payable in Common Shares or issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Corporation to holders of
its Common Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Corporation shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lessor number of Common Shares, then in any such case (y) the
number of Common Shares purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of Common Shares so
purchasable immediately
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prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such event,
and (z) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 1 l(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Corporation shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on such certificate and shall not be
deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event, directly or indirectly,
(a) the Corporation shall consolidate with, or merge with and into, any
other Person and shall not be the continuing or surviving corporation of such
merger or consolidation;
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(b) any Person shall consolidate with the Corporation, or merge with and
into the Corporation and the Corporation 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 the Corporation)
or cash or any other property; or
(c) the Corporation shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power (including without limitation securities creating any
obligation on the part of the Corporation and/or any of its Subsidiaries)
aggregating 50% or more of the assets or earning power of the Corporation and
its Subsidiaries (taken as a whole) to any Person other than the Corporation or
one or more of its wholly-owned Subsidiaries,
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof in accordance with the terms of
this Agreement and in lieu of Common Shares of the Corporation, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable
Common Shares of such Person (including the Corporation as successor thereto or
as the surviving corporation), 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 (A) multiplying the then current
Purchase Price by the number of Common Shares for which a Right is then
exercisable (without taking into account any adjustment
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previously made pursuant to Section 1 l(a)(ii) hereof) and dividing that product
by (B) 50% of the then current per share market price of the Common Shares of
such other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the Issuer of
such Common Shares shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and duties
of the Corporation pursuant to this Agreement; (iii) the term "Corporation"
shall thereafter be deemed to refer to such Issuer; and (iv) such Issuer shall
take such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights. For purposes of this Section 13,
"Issuer" shall mean (x) in the case of any event described in Sections 13(a) or
(b) above, the Person that is the continuing, surviving, resulting or acquiring
Person (including the Corporation as the continuing or surviving corporation of
a transaction described in Section 13(b) above), and (y) in the case of any
event described in Section 13(c) above, the Person that is the party receiving
the greatest portion of the assets or earning power (including without
limitation securities creating any obligation on the part of the Corporation
and/or any of its Subsidiaries) transferred pursuant to such transaction or
transactions; provided, however, that, in any such case, (A) if (1) no class of
equity security of such Person is, at the time of such merger, consolidation or
transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act and (2) such Person is a
Subsidiary, directly or indirectly, of another Person, a class of equity
security of which is and has been so registered, the term "Issuer" shall mean
such other Person; and (B), in case such
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Person is a Subsidiary, directly or indirectly, of more than one Person, a class
of equity security of two or more of which are and have been so registered, the
term "Issuer" shall mean whichever of such Persons is the issuer of the equity
security having the greatest aggregate market value. Notwithstanding the
foregoing, if the Issuer in any of the events listed above is not a corporation
or other legal entity having outstanding equity securities, then, and in each
such case, (i) if the Issuer is directly or indirectly wholly owned by a
corporation or other legal entity having outstanding equity securities, then all
references to Common Shares of the Issuer shall be deemed to be references to
the Common Shares of the corporation or other legal entity having outstanding
equity securities which ultimately controls the Issuer, and (ii) if there is no
such corporation or other legal entity having outstanding equity securities, (Y)
proper provision shall be made so that the Issuer 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 the Issuer had
been a corporation or other legal entity having outstanding equity securities;
and (Z) all other provisions of this Agreement shall apply to the Issuer of such
securities as if such securities were Common Shares. The Corporation shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated above) which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior to such consummation the Corporation and such Issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in this Section 13 and further providing that
as soon as
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practicable after the consummation of any such consolidation, merger, sale or
transfer, the Issuer will
(i) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earlier of the Expiration Date or the Redemption Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act.
The Corporation shall not enter into any transaction of the kind referred to in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
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Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered 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 American Stock Exchange or,
if the Rights are not listed or admitted to trading on the American Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Corporation. If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Corporation shall be used.
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(b) The Corporation shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Corporation
shall pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Common Share. For the purposes of
this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to Section 1 l(d)
hereof) for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the 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 Right 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 Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate
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<PAGE> 39
in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Corporation 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, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Corporation and the Rights Agent may deem and treat the Person m
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Corporation or the Rights
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<PAGE> 40
Agent) for all purposes whatsoever, and neither the Corporation nor the Rights
Agent shall be affected by any notice to the contrary.
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 Corporation 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 Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 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.
Section 18. Concerning the Rights Agent. The Corporation 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 Corporation also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred, in the
absence of 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
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<PAGE> 41
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Common Shares or for other securities of the Corporation,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust 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
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<PAGE> 42
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Corporation and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel, who, in the absence
of a conflict of interest, shall be the Corporation's regular counsel, and the
opinion of such counsel
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<PAGE> 43
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 maker be
proved or established by the Corporation 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 Secretary or the Treasurer of the Corporation
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Corporation and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the
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<PAGE> 44
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Corporation of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Common
Shares to be issued pursuant to this Agreement or any Right Certificate or as to
whether any Common Shares will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Corporation 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 of the
Chief Executive Officer or the Chief Financial Officer of the Corporation or any
person or persons designated in writing by either, and to apply to such officers
or persons for advice or instructions in connection with its duties,
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<PAGE> 45
and it shall not be liable for any action taken or suffered by it in good faith
in accordance with instructions of any such officer or person for any delay in
acting while waiting for those instructions. Any application by the Rights Agent
for written instructions from the Corporation 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 and/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 five Business
Days after the date any such officer of the Corporation 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 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 Corporation or become pecuniarily interested in any transaction in which
the Corporation may be interested, or contract with or lend money to the
Corporation 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 Corporation or for any other legal entity.
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(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Corporation 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. The Corporation 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
Corporation shall appoint a successor to the Rights Agent. If the Corporation
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 Corporation, 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 Corporation or by such a court, shall be (i) a corporation
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<PAGE> 47
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), validly existing and in good standing, if
applicable, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100 million or (ii) a subsidiary of a
corporation described in clause (i) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Corporation 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 Corporation
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or
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<PAGE> 48
kind or class of shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Corporation may, at its option, at any
time prior to the earlier of (i) the Final Expiration Date and (ii) the tenth
calendar day following the Share Acquisition Date (or if the Share Acquisition
Date shall have occurred prior to the Record Date, the Close of Business on the
tenth calendar day following the Record Date), or such later date as may be
specified by a majority of the Board of Directors prior to the time the right to
redeem would otherwise expire pursuant to this (ii) hereof, redeem all but not
less than all the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
by the Board of Directors may be made effective at such time on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish.
(b) If, following the occurrence of a Share Acquisition Date and following
the expiration of the right of redemption hereunder but prior to the occurrence
of an event described in Section 13 ("Triggering Event") each of the following
shall have occurred and remain in effect: (i) a Person who is an Acquiring
Person shall have transferred or otherwise disposed of a number of Common Shares
in a transaction, or series of transactions, which did not result in the
occurrence of any Triggering Event such that such Person is thereafter a
Beneficial Owner of less than 10% of the outstanding Common Shares, (ii) there
are no other
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Persons, immediately following the occurrence of the event described in clause
(i), who are Acquiring Persons, and (iii) the transfer or other disposition
described in clause (i) above was other than pursuant to a transaction, or
series of transactions, which directly or indirectly involved the Corporation or
any of its Subsidiaries, then the right of redemption set forth in Section 23(a)
shall be reinstated and thereafter be subject to the provisions of this
Section; provided however, that such Person shall for all purposes of this
Agreement continue to be an Acquiring Person.
(c) Immediately upon the action of the Board of Directors of the
Corporation ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Corporation 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(d) hereof) at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. The Corporation
shall promptly give public notice of any such redemption; provided, however,
that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights pursuant to paragraph (a), the
Corporation shall mail a notice of redemption to all the holders of the then
outstanding Rights in accordance with Section 26 hereof. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. Neither the
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Corporation nor any of its Subsidiaries, Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Corporation may, at its option, at any
time after a Share Acquisition 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 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Corporation, any Subsidiary of the Corporation, any
employee benefit plan of the Corporation or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Common
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Shares equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Corporation promptly
shall mail a notice of any such exchange to all of the holders of such Rights in
accordance with Section 26 hereof. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number 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 24, the Corporation, at its
option, may substitute equivalent common shares, as such term is defined in
Section 1l(b) hereof, for Common Shares exchangeable for Rights, as
appropriately adjusted to reflect adjustments in the voting rights of the Common
Shares pursuant to the terms thereof, so that the fraction of an equivalent
common share delivered in lieu of each Common Share shall have the same voting
rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Corporation shall take
all such action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights.
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(e) In any exchange pursuant to this Section 24, the Corporation shall not
be required to issue fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of such fractional Common
Shares, the Corporation shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares would otherwise
be issuable an amount in cash equal to the same fraction of the current market
value of a whole Common Share. For the purposes of this paragraph (e), the
current market value of a whole Common Share shall be the closing price of a
Common Share (as determined pursuant to Section 1l(d) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall propose (i) to pay any dividend payable
in stock of any class to the holders of its Common Shares or to make any other
distribution to the holders of its Common Shares (other than a regular quarterly
cash dividend), (ii) to offer to the holders of its Common Shares rights 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, (iii) to
effect any reclassification of its Common Shares, (iv) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of the assets or earning
power of the Corporation and its Subsidiaries (taken as a whole) to, any other
Person, or (v) to effect the liquidation, dissolution or winding up of the
Corporation, then, in each such case, the Corporation shall give to each holder
of a Right Certificate, in accordance
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with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the Common Shares, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Common Shares for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Shares, whichever shall be the earlier.
(b) In case a Share Acquisition Date shall occur, then the Corporation
shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of the occurrence of
such event, which notice shall describe such event and the consequences of such
event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Corporation 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:
Bowmar Instrument Corporation
5080 North 40th Street, Suite 475
Phoenix, Arizona 85018
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Attention: Mr. Thomas K. Lanin, President and Chief Executive
Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Corporation or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Corporation) as follows:
American Stock Transfer and Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Corporation 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 transfer agent for the Common Shares prior to issuance of Right
Certificates; otherwise, at the address of such holder as shown on the registry
books of the Rights Agent.
Section 27. Supplements and Amendments. Prior to the Distribution Date, if
the Corporation so directs, the Corporation and the Rights Agent shall
supplement or amend any provision of this Agreement in any manner which the
Corporation may deem desirable without the approval of any holders of
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Rights or certificates representing Common Shares. From and after the
Distribution Date, the Corporation, upon approval by the Board of Directors, and
the Rights Agent may supplement or amend this Agreement without the approval of
any holders of Rights or Certificates representing Common Shares 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 change or
supplement the provisions hereunder in any manner which the Corporation, upon
such approval, may deem desirable, including without limitation the addition of
other events requiring adjustment to the Rights under Sections 11 or 13 or
procedures relating to the redemption of the Rights, which change, amendment or
supplement shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of any
such Person); provided, however, that this Agreement may not be supplemented or
amended pursuant to this sentence to lengthen, pursuant to clause (iii) of this
sentence, any time period unless such lengthening is specifically contemplated
hereby or is for the purpose of protecting, enhancing or clarifying the rights
of, or the benefits to, the holders of Rights. Upon the delivery of a
certificate from the Chief Executive Officer or the Chief Financial Officer of
the Corporation which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment; provided, however, that the failure or refusal of
the Rights Agent to execute such supplement or amendment shall not affect the
validity or effective date of any supplement or amendment adopted by the
Corporation. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment shall be made which decreases the stated Redemption
Price or the period of time remaining until the Final Expiration Date.
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Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Corporation 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 or corporation other than the Corporation, 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 Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Indiana 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.
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Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
BOWMAR INSTRUMENT CORPORATION
By: /s/ Thomas K. Lanin
---------------------------------------
Thomas K. Lanin, President and
Chief Executive Officer
Attest:
By: /s/ Joseph G. Warren, Jr.
-------------------------------------------
Joseph G. Warren, Jr. Secretary
AMERICAN STOCK TRANSFER AND TRUST
COMPANY
By: /s/ Carolyn O'Neill
-----------------------------------
Carolyn O'Neill
Attest:
By:
-------------------------------------------
-------------------------------------------
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EXHIBIT A
Form of Right Certificate
Certificate No. Rights
Certificate No. _____ Rights
NOT EXERCISABLE AFTER December 5, 2006 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.
Right Certificate
Bowmar Instrument Corporation
This certifies that ________________________________, or registered
assigns, is the registered owner of the number of rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of December 6, 1996 (the "Rights
Agreement"), between Bowmar Instrument Corporation, an Indiana corporation (the
"Corporation"), and [Rights Agent] (the "Rights Agent"), to purchase from the
Corporation at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., eastern time, on December 5, 2006
at the office of the Rights Agent designated for such purpose, or at the office
of its successor as Rights Agent, one fully paid nonassessable share of the
Common Stock, without par value, of the Corporation (the "Common Shares"), at a
purchase price of $20.00 per Common Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of Common Shares which may be purchased upon
exercise hereof set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of December 6, 1996, 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
incorporated herein by this reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations of the Corporation and of the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Corporation and the above-mentioned offices of the
Rights Agent.
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This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
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. In no event will certificates for
fractional Rights be issued.
Subject to the provisions of the Rights Agreement and Board action, the
Rights evidenced by this Certificate (i) may be redeemed in whole, but not in
part, by the Corporation at a redemption price of $.01 per Right or (ii) may be
exchanged in whole or in part for an equal number of Common Shares.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this 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 Corporation 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 Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purchase
until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the Corporation,
and its corporate seal. Dated as of December _, 1996.
ATTEST: Bowmar Instrument Corporation
_______________________________ By:_________________________________
Joseph G. Warren, Secretary
Countersigned:
American Stock Transfer and Trust Company
By: _________________________
Authorized Signature
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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 Corporation, with full power
of substitution.
Dated:________________________________
______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate hereof (as defined in the Rights Agreement).
______________________________________
Signature
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Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right
Certificate.)
To Bowmar Instrument Corporation:
The undersigned hereby irrevocably elects to exercise _____________ Rights
represented by this Right Certificate to purchase the Common Shares issuable
upon the exercise of such Rights and requests that certificates for such Common
Shares be issued in the name of:
Please insert social security
or other identifying number:_________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:__________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated:______________________________
______________________________________
Signature
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Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_____________________________
Signature
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, the
Corporation and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
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EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On December 6, 1996, the Board of Directors of Bowmar Instrument
Corporation (the "Corporation") declared a dividend of one common share purchase
right (a "Right" or "Rights") for each outstanding share of the Corporation's
common stock, without par value (the "Common Shares"), of the Corporation and
entered into a rights agreement. If and when the Rights become exercisable, each
Right will entitle the registered holder to purchase from the Corporation one
Common Share at a purchase price of $20.00 (the "Purchase Price"), although the
price may be adjusted as described below. The description and terms of the
Rights are set forth in the rights agreement (the "Rights Agreement") between
the Corporation and The [Rights Agent], as Rights Agent (the "Rights Agent").
TRADING AND DISTRIBUTION OF RIGHTS
Initially, shareholders will not receive a separate certificate for the
Rights. The Rights will be represented by the outstanding Common Share
certificates with a copy of this Summary of Rights attached thereto. The Rights
cannot be bought, sold or otherwise traded separately from the Common Shares.
Certificates for Common Shares issued after the date of the Rights Agreement
will carry a notation that indicates that Rights are attached to the Common
Shares and that the terms of the Rights Agreement are incorporated therein.
Separate certificates representing the Rights will be distributed as soon
as practicable after the "Distribution Date," which is the earliest to occur
of:
(1) 10 calendar days following a public announcement that a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 15% or more of the outstanding Common
Shares, or
(2) 10 business days (or such later date as may be determined by
action of the Board of Directors prior to the time any person or group
becomes an Acquiring Person) following the commencement or announcement of
an intention to make a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of 30%
or more of such outstanding Common Shares.
Until the Distribution Date (or earlier exchange, redemption or expiration
of the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the date of the Rights Agreement, even without such notation
or a copy of this Summary of Rights
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being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and,
thereafter, such separate Right Certificates alone will evidence the Rights.
EXERCISABILITY AND EXPIRATION
The holders of the Rights are not required to take any action until the
Rights become exercisable. As described above, the Rights are not exercisable
until the Distribution Date. Holders of the Rights will be notified that the
Rights have become exercisable when the Rights Agent mails the Rights
Certificates. The Rights will expire on December 5, 2006 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed by the Corporation, in each case, as described below.
ADJUSTMENTS
To protect the value of the Rights to the holders, the Purchase Price
payable, and the number of Common Shares or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to
time (1) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (2) upon the grant to holders of the
Common Shares of certain rights or warrants to subscribe for or purchase Common
Shares at a price, or securities convertible into Common Shares with a
conversion price, less than the then current market price of Common Shares, or
(3) upon the distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Common Shares) or of
subscription rights or warrants, other than those referred to above.
These adjustments are called anti-dilution provisions and are intended to
ensure that a holder of Rights will not be adversely affected by the occurrence
of such events. With certain exceptions, the Corporation is not required to
adjust the Purchase Price until cumulative adjustments require a change of at
least 1% in the Purchase Price. No fractional Common Shares will be issued and
in lieu thereof, an adjustment 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.
FLIP-OVER EVENTS AND FLIP-IN EVENTS
In the event that (1) the Corporation is acquired in a merger or other
business combination transaction and the Corporation is not the surviving
corporation, or (2) any person consolidates or merges with the Corporation and
all or part of the Corporation's Common Shares are exchanged for securities,
cash or property of any other person, or (3) 50% or more
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of the Corporation's consolidated assets or earning power are sold
(collectively, "Flip-Over Events"), proper provision will be made so that each
holder of a Right, other than the Acquiring Person, will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring corporation
which at the time of such transaction will have a market value of two times the
exercise price of the Right. In the event that a person acquires 15 % or more of
the outstanding Common Shares, (a "Flip-In Event"), proper provision shall be
made so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a market value of
two times the exercise price of the Right.
EXCHANGE OPTION
At any time after a person becomes an Acquiring Person, and prior to the
acquisition by such Acquiring Person of 50% or more of the outstanding Common
Shares, the Board of Directors of the Corporation may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
REDEMPTION
At any time prior to the tenth calendar day following the date of a public
announcement that a person or group has become an Acquiring Person, the Board of
Directors of the Corporation may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
If the Board of Directors' ability to redeem the Rights pursuant to the
Rights Agreement has expired, but a Flip-Over Event or certain Flip-In Events
have not yet occurred, the redemption right will be reinstated if the Acquiring
Person disposes of a sufficient number of the Corporation's Common Shares so
that such person then owns less than 10% of the outstanding Corporation's Common
Shares and if certain other conditions are met.
The terms of the Rights may be amended by the Board of Directors of the
Corporation without the consent of the holders of the Rights, except that from
and after such time as any person becomes an Acquiring Person no such amendment
may adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Corporation, including, without limitation, the
right to vote or to receive dividends.
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A copy of the Rights Agreement is available from the Corporation at no
charge upon written request. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by this reference.
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[BOWMAR LETTERHEAD]
EXHIBIT 5 (c)
December 16, 1996
Dear Fellow Shareholder:
On December 16, 1996, the Board of Directors of Bowmar Instrument
Corporation adopted a Shareholder Rights Plan. The Plan is intended to protect
the long-term value of our fellow shareholder's investments in Bowmar by
encouraging any potential acquiror to negotiate with your Board of Directors
before attempting a hostile take-over. More than 1,300 companies have adopted
similar plans.
To implement the Plan, shareholders of record as of December 16, 1996,
will receive one right for each outstanding share of common stock. Upon the
happening of certain events the rights become exercisable to purchase shares of
common stock (or, in certain circumstances, other considerations). A summary of
the Plan is included for your reference.
You will not receive a rights certificate unless one of the events
described in the enclosed summary occurs. You need not take any action with
respect to the rights at this time.
We are not aware of any hostile attempt to acquire control of Bowmar. We
believe, however, that protection of our shareholders' long-term interest is
appropriate, based on the market's current undervaluing of your stock.
The issuance of rights will not weaken Bowmar's financial strength nor
interfere with its business plan. Issuance of the rights has no dilutive effect,
will not affect reported earnings per share, is not presently taxable to you and
will not change the way in which you currently trade in Bowmar common stock.
Your Board of Directors is committed to continuing to build long-term
value for Bowmar's shareholders. The Plan is one step towards that goal. We
thank you for your continuing support.
Sincerely,
Thomas K. Lanin
President and Chief Executive Officer
The enclosure referred to is Exhibit B to the Shareholders Rights Agreement
dated December 6, 1996 between Bowmar Instrument Corporation and American Stock
Transfer Company which is Exhibit 5 (b) to this Form 8-K.
