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FORM 8-A
Securities and Exchange Commission
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
DIXON TICONDEROGA COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 23-0973760
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(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
2600 Maitland Center Parkway, Suite 200
Maitland, Florida 32751
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(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which each
to be so registered class is to be registered
None
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A.(c)(1),
please check the following box. [ ]
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of
a
concurrent registration statement under the Securities Act of 1933
pursuant to General Instruction A.(c)(2), please check the following
box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
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(Title of class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On March 3, 1995, the Board of Directors of the Company
declared a dividend distribution of one Right for each outstanding
share of Common Stock, $1.00 par value (the "Common Stock"), of the
Company to the stockholders of record on March 31, 1995 (the "Record
Date"). Each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series A Junior Preferred
Stock, $1.00 par value of the Company (the "Preferred Stock"), at a
Purchase Price of $30.00 per one one-thousandth of a share (the
"Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in the Rights Agreement (the "Rights
Agreement"), dated as of March 3, 1995, between the Company and
First Union National Bank of North Carolina, a U.S. banking
corporation, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Rights Certificate will be distributed. The Rights will separate from
the Common Stock and a Distribution Date will occur upon the earlier
of (i) 10 days following a public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of
20% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) 10 business days (or such later date as may
be determined by the Board of Directors) following the commencement
of a tender offer or exchange offer that would result in a person or
group beneficially owning 30% or more of such outstanding shares of
Common Stock. The term "Acquiring Person" specifically excludes (i)
the Company, (ii) any Subsidiary (as such term is defined in the
Rights Agreement) of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, (iv) any person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan, (v) any Exempt Person (as such
term is defined in the Rights Agreement), (vi) the Gino N. Pala Family
Members (as such term is defined in the Rights Agreement) as long as
the Gino N. Pala Family Members own in the aggregate less than 30% of
the outstanding shares of Common Stock of the Company, or (vii) any
person who or which would be an Acquiring Person solely by reason of
(A) being the beneficial owner of shares of Common Stock, the
beneficial ownership of which was acquired by such person pursuant to
a transaction or series of related transactions approved by the
Continuing Directors (as such term is defined in the Rights Agreement)
of the Company before such person otherwise became an Acquiring Person
or (B) any other action or transaction which the Continuing Directors
of the Company determines should not, consistent with the purposes of
the Rights Agreement, cause such person to be deemed an Acquiring
Person, which determination is made prior to such person otherwise
becoming an Acquiring Person. Until the Distribution Date, (i) the
Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates will contain a notation incorporating
the Rights Agreement by reference and (iii) the surrender for transfer
of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
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The Rights are not exercisable until the Distribution Date and
will expire at the close of business on March 31, 2005, unless earlier
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter,
the separate Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board of Directors, only shares
of Common Stock prior to the Distribution Date will be issued with
Rights.
In the event that any person becomes an Acquiring Person unless
such acquisition is made pursuant to a tender or exchange offer for
all outstanding shares of the Company, at a price determined by a
majority of the independent Directors of the Company who are not
represen- tatives, nominees, Affiliates or Associates of an Acquiring
Person to be fair and otherwise in the best interest of the Company
and its stockholders), each holder of a Right will thereafter have the
right to receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company),
having a value equal to two times the exercise price of the Right.
The exercise price is the Purchase Price subject to adjustment in
accordance with the terms of the Rights Agreement. Notwithstanding
any of the foregoing, following the occurrence of the event set forth
in this paragraph (the "Flip-In Event"), all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
However, Rights are not exercisable following the occurrence of the
Flip-in Event set forth above until such time as the Rights are no
longer redeemable by the Company as set forth below.
In the event that following the Stock Acquisition Date, (i) the
Company is acquired in a merger or consolidation in which the Company
is not the surviving corporation (other than a merger that follows a
tender offer determined to be fair to the stockholders of the Company,
as described in the preceding paragraph) or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder
of a Right (except Rights which have previously been voided as set
forth above) shall thereafter have the right to receive, upon exercise
of the Right, Common Stock of the acquiring company having a value
equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred
Stock or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of, the Preferred Stock, (ii) if holders of the
Preferred Stock are granted certain rights or warrants to subscribe
for Preferred Stock or convertible securities at less than the
current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional Units will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market
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price of the Preferred Stock on the last trading date prior to the
date of exercise.
At any time until 10 days following the Stock Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right. Under certain circumstances, the decision
to redeem will require the concurrence of a majority of the Continuing
Directors (as defined below). Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the
date of the Rights Agreement and any person who is subsequently
elected to the Board if such person is recommended or approved by a
majority of the Continuing Directors, but shall not include an
Acquiring Person, or an affiliate or associate of an Acquiring Person,
or any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to
the Company, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company
as set forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors) in
order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interest of
any Acquiring Person), or to shorten or lengthen any time period under
the Rights Agreement; provided, however, that no amendment to adjust
the time period governing redemption shall be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement is being filed with the Securities
and Exchange Commission as an Exhibit to this Registration Statement.
A copy of the Rights Agreement is available free of charge from the
Company. This Summary Description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
ITEM 2. EXHIBITS.
1. Form of Shareholder Rights Agreement dated as of March 3,
1995, between Registrant and First Union National Bank
of North Carolina
2. Form of Rights Certificate.
3. Form of Certificate of Designation, Preferences and Rights
of Series A Junior Preferred Stock
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto
duly authorized.
(Registrant) DIXON TICONDEROGA COMPANY
Date: March 3, 1995 By: /s/ Gino N. Pala
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As: Chairman and CEO
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EXHIBIT LIST
1. Form of Shareholder Rights Agreement dated as of March 3, 1995,
between Registrant and First Union National Bank of
North Carolina
2. Form of Rights Certificate
3. Form of Certificate of Designation, Preferences and Rights of
Series A Junior Preferred Stock
<PAGE>
Exhibit 1
FORM OF
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SHAREHOLDER RIGHTS PLAN
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DIXON TICONDEROGA COMPANY
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
as Rights Agent
RIGHTS AGREEMENT
Dated as of March 3, 1995
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . 5
Section 3. Issue of Rights Certificates. . . . . . . . . . . . . 6
Section 4. Form of Rights Certificates . . . . . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . . . . . 8
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates. . . . . . . . . . . 9
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. . . . . . . . . . . . . . . . . . . . 10
Section 8. Cancellation and Destruction of Rights Certificates . 12
Section 9. Reservation and Availability of Capital Stock. . . . 12
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . 14
Section 11. Adjustment of the Purchase Price, Number and Kind of
Shares or Number of Rights. . . . . . . . . . . . . . 14
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power . . . . . . . . . . . . . . . . . . 22
Section 14. Fractional Rights and Fractional Shares . . . . . . . 25
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . 26
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . 26
Section 17. Rights Certificate Holder Not Deemed a Stockholder. . 27
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . 28
Section 19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . 29
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . 31
Section 22. Issuance of New Rights Certificates . . . . . . . . . 32
Section 23. Redemption and Termination. . . . . . . . . . . . . . 32
Section 24. Notice of Certain Events. . . . . . . . . . . . . . . 33
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . 34
Section 26. Supplements and Amendments. . . . . . . . . . . . . . 35
Section 27. Successors. . . . . . . . . . . . . . . . . . . . . . 36
Section 28. Determinations and Actions by the Board of
Directors, Etc. . . . . . . . . . . . . . . . . . . . 36
Section 29. Benefits of this Agreement. . . . . . . . . . . . . . 36
Section 30. Severability. . . . . . . . . . . . . . . . . . . . . 36
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . 37
Section 32. Counterparts. . . . . . . . . . . . . . . . . . . . . 37
Section 33. Descriptive Headings. . . . . . . . . . . . . . . . . 37
Exhibits:
A - Certificate of Designation of Preferences and Rights
B - Summary of Rights
C - Form of Rights Certificates
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 3, 1995 (the "Agreement"),
between Dixon Ticonderoga Company, a Delaware corporation (the
"Company"), and First Union National Bank of North Carolina, a United
States banking corporation (the "Rights Agent").
BACKGROUND STATEMENT
On March 3, 1995 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a
dividend distribution of one Right for each share of Common Stock, par
value $1.00 per share, of the Company (the "Common Stock") outstanding
at the close of business on March 31, 1995 (the "Record Date"), and
has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p)
hereof) for each share of Common Stock of the Company issued between
the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as defined in Section
3 hereof), each Right initially representing the right to purchase one
one-thousandth of a share of Series A Junior Preferred Stock of the
Company having the rights, powers and preferences set forth in the
form of Certificate of Designation, Preferences and Rights attached
hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and Associates (as
such term is hereinafter defined) of such Person, shall be the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company, (iii)
any employee benefit plan of the Company or of any Subsidiary of the
Company, (iv) any Person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan, (v) any
Exempt Person (as such term is hereinafter defined), (vi) the Gino N.
Pala Family Members (as such term is hereinafter defined) so long as
the Gino N. Pala Family Members (together with their respective
Affiliates and Associates) Beneficially Own, in the aggregate, less
than 30% of the outstanding shares of Common Stock of the Company, or
(vii) any Person, together with all Affiliates and Associates of such
Person, who or which would be an Acquiring Person solely by reason of
(A) being the Beneficial Owner of shares of Common Stock, the
Beneficial Ownership of which was acquired by such Person pursuant to
a transaction or series of related transactions approved by the
Continuing Directors (as such term is hereinafter defined) of the
Company before such Person otherwise became an Acquiring Person, or
(B) any other action or transaction which the Continuing Directors of
the Company determine should not, consistent with the purposes of this
Rights Agreement, cause such Person to be deemed an Acquiring Person,
which determination is made prior to such Person otherwise becoming
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an Acquiring Person; and provided further, that in the event a Person
is not an Acquiring Person by reason of subsections (A) or (B) of this
Section 1(a)(vii), such Person shall become an Acquiring Person in the
event such Person thereafter acquires Beneficial Ownership of an
additional 1% of the Common Stock of the Company unless such
acquisition of additional Common Stock would not result in such Person
becoming an Acquiring Person by reason of any provision of this
Agreement, including, without limitation, subsections (A) or (B) of
this Section 1(a)(vii). No Person shall become an Acquiring Person
either (x) as a result of an acquisition of shares of Common Stock by
the Company, which, by reducing the number of shares of Common Stock
outstanding, increases the proportionate number of shares of Common
Stock Beneficially Owned by such person to 20% or more (or, in the
case of the Gino N. Pala Family Members, 30% or more) of the shares
of Common Stock then outstanding; provided, however, that if a Person
becomes the Beneficial Owner of 20% or more (or, in the case of the
Gino N. Pala Family Members, 30% or more) of the shares of Common
Stock then outstanding by reason of share purchases by the Company and
shall, after such purchases by the Company, become the Beneficial
Owners of an additional 1% of the shares of Common Stock, then such
Person shall be deemed to be an Acquiring Person, or (y) if the Board
of Directors of the Company determines in good faith that a person who
would otherwise be an Acquiring Person, as defined pursuant to the
foregoing provisions of this subsection 1(a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would
no longer be an Acquiring Person, then such Person shall not be deemed
to be an Acquiring Person for any purposes of this Agreement.
(b) "Affiliate" shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended and in effect on the date
of this Agreement (the "Exchange Act").
(c) "Associate" of a Person shall mean (i) with respect
to a corporation, any officer or director thereof or of any Subsidiary
(as such term is hereinafter defined) thereof, or any Beneficial Owner
of 10% or more of any class of equity security thereof, (ii) with
respect to an association, any officer or director thereof or of a
Subsidiary thereof, (iii) with respect to a partnership, any general
partner thereof or any limited partner thereof who is, directly or
indirectly, the Beneficial Owner of a 10% or greater ownership
interest therein, (iv) with respect to a business trust, any officer
or trustee thereof or of any Subsidiary thereof or any Person who is,
directly or indirectly, the Beneficial Owner of a 10% or greater
ownership interest therein, (v) with respect to any other trust or an
estate, any trustee, executor or similar fiduciary or any Person who
has a 20% or greater interest as a beneficiary in the income from or
principal of such trust or estate or who otherwise has a substantial
beneficial interest in such trust or estate, (vi) with respect to a
natural Person, the spouse of such Person, or any relative of such
Person or such Person's spouse who has the same home as such person,
or any trust for the benefit of any such person, and (vii) any
Affiliate of such Person.
(d) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
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(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights; or
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a
result of (A) an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (1) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (2) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report), or (B) securities issued or issuable pursuant to any employee
benefit plan of the Company or of any Subsidiary of the Company or any
employment agreement, arrangement or other understanding between the
Company or any Subsidiary of the Company and any Person or any of such
Person's Affiliates or Associates; or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's Affiliates
or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the
proviso to subpara- graph (ii) of this paragraph (d)) or disposing of
any voting securities of the Company; provided, however, that nothing
in this paragraph (d) shall cause a person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such person's
participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
<PAGE> 4
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State
of North Carolina are authorized or obligated by law or executive
order to close.
(f) "Close of Business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M., New York
City time, on the next succeeding Business Day.
(g) "Common Stock" shall have the meaning set forth in
the Background Statement to this Agreement, except that "Common Stock"
when used with reference to any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power,
or the equity securities or other equity interest having power to
control or direct the management, of such Person.
(h) "Continuing Director" shall mean (i) any member of
the Board of Directors (the "Board") of the Company, while such Person
is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of
an Acquiring Person or of any such Affiliate or Associate, and was a
member of the Board prior to the date of this Agreement, or (ii) any
Person who subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing Directors.
(i) "Exempt Person" shall mean any Person who, together
with all Affiliates and Associates of such Person, on the Rights
Dividend Declaration Date is the Beneficial Owner of securities (as
disclosed in public filings with the Securities and Exchange
Commission on the Rights Dividend Declaration Date) representing 20%
or more, but less than 25%, of the shares of Common Stock outstanding
on the Rights Dividend Declaration Date; provided that any such Person
(i) shall no longer be deemed to be an "Exempt Person" and shall be
deemed an "Acquiring Person" if such Person, together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner, at any time after the Rights Dividend Declaration Date, of
securities representing 25% or more of the shares of Common Stock then
outstanding, and (ii) shall no longer be deemed to be an "Exempt
Person" if such Person, together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner, at any time after the
Rights Dividend Declaration Date, of securities representing less than
20% of the shares of Common Stock then outstanding. The purchaser,
assignee or transferee of the shares of Common Stock of an Exempt
Person shall not be an Exempt Person.
(j) "Gino N. Pala Family Members" shall mean, (i) Gino
N. Pala, (ii) his spouse, (iii) his sister and brother, Angela Scerba
and Ernest A. Pala, (iv) the children of the persons named in the
foregoing clauses (i) and (iii), (v) any corporation or general or
limited partnership (whether now existing or hereafter formed) of
which all of the outstanding equity or partnership interests,
respectively, are beneficially owned by one or more of the persons
<PAGE> 5
referred to in the foregoing clauses (i), (ii), (iii) and (iv), or
(vi) any trust of which one or more of the Persons referred to in the
foregoing clauses (i), (ii), (iii) and (iv) are the sole trustees and
the owners of all of the beneficial interests therein.
(k) "Person" shall mean any individual, firm
corporation, partnership or other entity.
(l) "Preferred Stock" shall mean shares of Series A
Junior Preferred Stock, par value $1.00 per share, of the Company,
and, to the extent that there are not a sufficient number of shares
of Series A Junior Preferred Stock authorized to permit the full
exercise of the Rights, any other series of Preferred Stock, par value
$1.00 per share, of the Company designated for such purpose containing
terms substantially similar to the terms of the Series A Junior
Preferred Stock.
(m) "Purchase Price" shall have the meaning set forth
in Section 7(b) hereof.
(n) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(o) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(p) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(q) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by such
Person, or other- wise controlled by such Person.
(r) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(s) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the Common
Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such Co-Rights Agents as it may deem necessary
or desirable.
<PAGE> 6
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on
the tenth day after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date, the
close of business on the Record Date), or (ii) the close of business
on the tenth business day (or such later date as the Board shall
determine) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner of 30%
or more of the shares of Common Stock then outstanding (the earlier
of (i) and (ii) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
subsection (b) of this Section 3) by the certificates for the Common
Stock registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the
Rights will be transferable only in connection with the transfer of
the underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail,
to each record holder of the Common Stock as of the close of business
on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more right certificates (the "Rights
Certificates"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided herein. In the event that
an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(p) hereof, at the time of
distribution of the Right Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of
any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder
of the Common Stock as of the close of business on the Record Date,
at the address of such holder shown on the records of the Company.
With respect to certificates for the Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the earlier of the Distribution Date or
the Expiration Date (as such term is defined in Section 7 hereof), the
transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock.
<PAGE> 7
(c) Rights shall be issued in respect of all shares
of Common Stock which are issued (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior
to the earlier of the Distribution Date or the Expiration Date.
Certificates representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear the following
legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
Dixon Ticonderoga Company (the "Company") and First Union
National Bank of North Carolina (the "Rights Agent") dated
as of March 3, 1995 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy
of which is on file at the principal offices of the Rights
Agent. Under certain circumstances, as set forth in the Rights
Agreement, such Right will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Rights
Agent will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associates thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and regis-
tered holders of Common Stock shall also be the registered holders of
the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit C hereto
and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase
such number of one one- thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such
exercise price per one one- thousandth of a share, the "Purchase
Price"), but the amount and type of securities purchasable upon the
<PAGE> 8
exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially owned
by; (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B)
a transfer which the Board of Directors of the Company has determined
is part of a plan, arrangement or understanding which has as a primary
purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in
Section 7(e) of such Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates
shall be manually countersigned by the Rights Agent and shall not be
valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature
by the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had
not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Rights Certificate, shall
be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement any
such person was not such an officer.
<PAGE> 9
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the date of each of the Rights
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section
7(e) and 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 Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a share of Preferred
Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights
Certificate or certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the
Person entitled hereto a Rights Certificate or Certificates, as the
case may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to the Company, and reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
<PAGE> 10
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Unless otherwise provided herein, including,
without limitation, the restrictions on exercisability set forth in
Section 23(a), the Rights shall not be exercisable until, and shall
become exercisable on, the Distribution Date. Subject to Section 7(e)
hereof, the registered holder of any Rights Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set
forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof)
in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the
principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-thousandths of a share (or
other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to the
earlier of (i) the close of business on March 31, 2005 (the "Final
Expiration Date"), or (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof (the earlier of (i) and (ii) being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of
a Share of Preferred Stock pursuant to the exercise of a Right shall
initially be $30.00, and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and shall be payable
in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one one-thousandth
of a share of Preferred Stock (or other shares, securities, cash or
other assets, as the case may be) to be purchased as set forth below
and an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly:
(i) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is
the transfer agent for such shares) certificates for the total number
of one one-thousandths of a share of Preferred Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or, if the Company shall have elected
to deposit the total number of shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depository agent, requisition
from the depository agent depository receipts representing such number
of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer
agent with the depository agent) and the Company will direct the
depository agent to comply with such request;
<PAGE> 11
(ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in accordance
with Section 14 hereof;
(iii) after receipt of such certificates or
depository receipts, cause the same to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and
(iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights
Certificate.
The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made in cash or by
certified bank check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate. The Company reserves
the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so
that only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby,
a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii)
a transferee of an Acquiring Person (or of any such Associate or
Affili- ate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance
of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but neither the Company nor the Rights Agent
<PAGE> 12
shall have any liability to any holder of Rights Certificates or other
Person as a result of any failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination, or exchange shall, if surrendered to
the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Rights Certificates shall be
issued in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled
Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized any unused shares of Common
Stock and/or other securities or out of its authorized and issued
shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock
and/or other securities) that, as provided in this Agreement including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise
in full of all outstanding Rights.
(b) The Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares
of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and deliverable
upon the exercise of the Rights to be listed, upon official notice of
issuance, upon the principal national securities exchange, if any, on
which the Common Stock is listed or, if the principal market for the
Common Stock is not on any national securities exchange, to be
eligible for quotation in the National Association of Securities
Dealers, Inc. Automated Quotation System or any successor thereto or
other comparable quotation system.
<PAGE> 13
(c) The Company shall use its best efforts to:
(i) file, as soon as practicable following the
earliest date after the first occurrence of a Section 11(a)(ii) Event
on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii) hereof, a registration statement under the Securities Act
of 1933 (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 earlier of (A) the date as of which
the Rights are no longer exercisable for such securities, and (B) the
date of the expiration of the Rights.
The Company will also take such action as may be appropriate under,
or to ensure compliance with, the securities or blue sky laws of the
various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the
first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit
it to become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time
as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one
one-thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for a
number of one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise
of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the
<PAGE> 14
issuance or delivery of a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case
may be) in respect of a name other than that of, the registered holder
of the Rights Certificates evidencing Rights surrendered for exercise
or to issue or deliver any certificates for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall
have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it hall been
established to the Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each person in whose
name any certificate for a number of one one-thousandths of a share
of Preferred Stock (or Common Stock and/or other securities, as the
case may be) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such
fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or Common Stock and/or other securities,
as the case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided
herein.
SECTION 11. ADJUSTMENT OF THE PURCHASE PRICE, NUMBER AND KIND
OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and
kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide
the outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any
<PAGE> 15
Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Preferred Stock or capital stock, as the case may
be, which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the
Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person (other than an Exempt
Person), alone or together with its Affiliates and Associates, shall,
at any time after the Rights Dividend Declaration Date, become the
Acquiring Person, unless the event causing such Person to be an
Acquiring Person is a transaction set forth in Section 13(a) hereof,
or is an acquisition of shares of Common Stock pursuant to a tender
offer or an exchange offer for all outstanding shares of Common Stock
at a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the Company
and who are not representatives, nominees, Affiliates or Associates
of an Acquiring Person, after receiving advice from one or more
investment banking firms, to be (A) at a price which is fair to
Stockholders (taking into account all factors which such members of
the Board deem relevant including, without limitation, prices which
could reasonably be achieved if the company or its assets were sold
on an orderly basis designed to realize maximum value) and (B)
otherwise in the best interests of the Company and its stockholders,
then, promptly following the occurrence of such event, proper
provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of a
number of one one-thousandths of a share of Preferred Stock, such
number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares
of Common Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company shall
(A) determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value"), and (B) with respect to
each Right (subject to Section 7(e) hereof), make adequate provision
to substitute for the Adjustment Shares, upon the exercise of a Right
<PAGE> 16
and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock, such as the Preferred Stock,
which the Board has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares of preferred
stock being referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the Current Value
(less the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board based upon the advice
of a nationally recognized investment banking firm selected by the
Board; provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to
the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. For purposes
of the preceding sentence, the term "Spread" shall mean the excess of
(i) the Current Value over (ii) the Purchase Price. If the Board
determines in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek Shareholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended,
is herein called the "Substitution Period"). To the extent that
action is to be taken pursuant to the first and/or third sentences of
this Section 11(a)(iii)), the Company (A) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (B) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
seek such shareholder approval for such authorization of additional
shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of each Adjustment Share shall be
the Current Market Price per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the per share or per unit value of any
Common Stock Equivalent shall be deemed to equal the Current Market
Price per share of the Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and
<PAGE> 17
preferences as the shares of Preferred Stock ("Equivalent Preferred
Stock")) or securities convertible into Preferred stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per share
of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred
Stock) less than the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock 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 shares of Preferred Stock
outstanding on such record date, plus the number of additional shares
of Preferred Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible). In case such subscription
price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for
the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event
that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation), of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out
of the earnings or retained earnings of the Company), assets (other
than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) 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 Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such Current Market Price
(as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such distribution
<PAGE> 18
is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) hereof,
the Current Market Price per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of
such Common Stock for the thirty (30) consecutive Trading Days
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the Current Market Price per
share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the ten
(10) consecutive Trading Days immediately following such date;
provided, however, that in the event that the Current Market Price per
share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination or reclassification shall not have occurred
prior to the commencement of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as set forth above, then, and in each
such case, the Current Market Price shall be properly adjusted to take
into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the American Stock Exchange or, if
the shares of Common Stock 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 shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use, or, if
on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on
such date as determined in good faith by the Board shall be used. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is
not publicly held or not so listed or traded, Current Market Price per
share shall mean the fair value per Share as determined in good faith
<PAGE> 19
by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the Current Market Price per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock
in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the Current Market Price per
share of Preferred Stock shall be exclusively deemed to be an amount
equal to 1,000 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, Current Market Price per share
of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the
Current Market Price of a Unit shall be equal to the Current market
Price of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest ten-thousandth of a
share of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. 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 (3)
years from the date of the transaction which mandates such adjustment,
or (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-thousandths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the Rights,
<PAGE> 20
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b)
and (c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of one one-thousandths of a
share of Preferred Stock (calculated to the nearest one-millionth)
obtained by (i) multiplying (x) the number of one one-thousandth of
a share covered by a Right immediately prior to this adjustment, by
(y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of one one-thousandths of a share
of Preferred Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall
be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company,
new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express
the Purchase Price per one one-thousandth of a share and the number
<PAGE> 21
one one-thousandths of a share which were expressed in the initial
Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value,
if any, of the number of one one-thousandths of a share of Preferred
Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable such number of one one-thousandths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any
Right exercised after such record date the number of one
one-thousandths of a share of Preferred Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise over
and above the number of one one-thousandths of a share of Preferred
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment the Board of Directors of the Company shall determine
to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of
Preferred Stock at less than the Current Market Price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends, or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction,
or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
<PAGE> 22
other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, or (y) prior to, simultaneously
with, or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution
Date (i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event by a fraction of the numerator which shall be the total number
of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11
and Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the
Rights Agent, and with each transfer agent for the Preferred Stock and
the Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior
to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with,
or merge with and into, any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving
<PAGE> 23
corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof) shall consolidate with, or merge with or into,
the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with
such consolidation or merger, all or part of the outstanding shares
of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z)
the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or
a series of related transac- tions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in
one or more transactions each of which complies with Section 11 (o)
hereof), then, and in each such case (except as may be contemplated
by Section 13(d) hereof), proper provision shall be made so that: (i)
each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of one one- thousandths
of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or,
if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event
by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant
to Section 11(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with
the consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(iii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
<PAGE> 24
(i) in the case of any transaction clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other
Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more
of which are and have been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party
shall have a sufficient number of authorized shares of its common
stock which have not been issued or reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b)
of this Section 13 and further providing that, as soon as practicable
after the date of any consolidation, merger, or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party
will:
(i) prepare and file a registration statement
under the 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 Expiration Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and each of
its Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
<PAGE> 25
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a tender offer or exchange offer
for all outstanding shares of Common Stock which complies with the
provisions of Section 11(a)(ii)(B) hereof (or a wholly owned
Subsidiary of any such Person or Persons), (ii) the price per share
of Common Stock offered in such transaction is not less than the price
per share of Common Stock paid to all holders of shares of Common
Stock whose shares were purchased pursuant to such tender offer or
exchange offer and (iii) the form of consideration being offered to
the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to
such tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided
in Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Current
Market Value of a whole Right. For 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 of the Rights 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 Company. If on any such date no such market maker
is making a market in the Rights the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred
Stock) upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share of
<PAGE> 26
Preferred Stock). In lieu of fractional shares of Preferred Stock
that are not integral multiples of one one-thousandth of a share of
Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Current
Market Value of one one- thousandth of a share of Preferred Stock.
For purposes of this Section 14(b), the Current Market Value of one
one-thousandth of a share of Preferred Stock shall be one
one-thousandth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional
shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Current
Market Value of one share of Common Stock. For purposes of this
Section 14(c), the Current Market Value of one share of Common Stock
shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as permitted
by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of
any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights 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 shall be entitled to specific
performance of the obligations hereunder and injunctive relief against
actual or threat- ened violations of the obligations hereunder of any
Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
<PAGE> 27
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights
Agent if surrendered at the principal office or offices of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice
to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the
Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the
number of one one-thousandths of a share of Preferred Stock or any
other securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised
in accordance with the provisions hereof.
<PAGE> 28
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent , its officers, employees, agents
and directors for, and to hold each of them harmless against, any
loss, liability, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent or such other indemnified party
in connection with the acceptance or administration of this Agreement
or the exercise or performance of its duties hereunder, including the
costs and expenses of defending against any claim of liability arising
under this Agreement.
(b) The Rights Agent shall be protected by the Company
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 or the exercise of its duties hereunder in reliance
upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
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, however, 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 Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
<PAGE> 29
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations expressly imposed by this
Agreement (and no implied duties or obligations shall be read into
this Agreement against the Rights Agent) upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identity
of any Acquiring Person, Affiliate or Associate and the determination
of "Current Market Price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any person reasonably believed by the
Rights Agent to be the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or
any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own gross 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 Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates),
but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent is serving as an administrative
agent and, accordingly, shall not be under any responsibility in
respect of the validity of any provision of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
<PAGE> 30
contained in this Agreement or in any Rights Certificate; nor shall
it be responsible for any change in the exercisability of the Rights
or any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after actual notice of any
such adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation
of any shares of Common Stock or Preferred Stock to be issued pursuant
to this Agreement or any Rights Certificate or as to whether any
shares of Common Stock or Preferred Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties
hereunder from any person reasonably believed by the Rights Agent to
be the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or for any delay in
acting while awaiting instructions. Any application by the Rights
Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken
or omitted by the Rights Agent under this Agreement and the date on
or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in
such application (which date shall no be less than five business days
after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall
have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
<PAGE> 31
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer the
certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the
Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing mailed
to the Company, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30)
days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Rights Certificate (who shall, with such notice, submit
his Rights Certificate for inspection by the Company), then any
registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such
a court, shall be a corporation organized and doing business under the
laws of the United States or of the State of New York (or of any other
state of the United States so long as such corporation is authorized
to do business as a banking institution in the State of New York), in
good standing, having a principal office in the State of New York,
which is authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $100,000,000. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been
<PAGE> 32
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stack, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure
to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made
in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise, conversion
or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed neces- sary or appropriate by the
Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company
or the Person to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of business
on the tenth day following the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth day following the Record Date), or
(ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right, as
such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
"Redemption Prices"); provided, however, if the Board of Directors of
the Company authorizes redemption of the Rights in either of the
circumstances set forth in clauses (i) and (ii) below, then there must
be Continuing Directors then in office and such authorization shall
require the concurrence of a majority of such Continuing Directors:
<PAGE> 33
(i) such authorization occurs on or after the time a Person becomes
an Acquiring Person, or (ii) such authorization occurs on or after the
date of a change (resulting from a proxy or consent solicitation or
an action by written consent of stockholders, whether or not made
pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act) in a majority
of the directors in office at the commencement of such solicitation,
or prior to such written consent, if any Person who is a participant
in such solicitation, or who signed such consent, has stated (or, if
upon the commencement of such solicitation, a majority of the Board
of Directors of the Company has determined in good faith) that such
Person (or any of its Affiliates or Associates) intends to take, or
may consider taking, any action which would result in such Person
becoming an Acquiring Person or which would cause the occurrence of
a Triggering Event unless, concurrent with such solicitation, such
Person (or one or more of its Affiliates or Associates) is making a
cash tender offer pursuant to a Schedule 14D-1 (or any successor form)
filed with the Securities and Exchange Commission for all outstanding
shares of Common stock not beneficially owned by such Person (or by
its Affiliates or Associates). Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash, shares
of Common Stock (based on the "Current Market Price" as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by
the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent 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 for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice to all such holders
at each holder's last address as it appears upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock. 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.
SECTION 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Stock rights
or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other
<PAGE> 34
securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred
Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), 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 transaction or a series of related
transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding up
of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, distribution 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 shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above
at least twenty (20) days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such action,
and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date
of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the Company
shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders
of Rights under Section 11(a)(ii) hereof, and (ii) all references in
the preceding paragraph to Preferred Stock shall be deemed thereafter
to refer to Common Stock and/or, if appropriate, other securities.
SECTION 25. NOTICES. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
Dixon Ticonderoga Company
Post Office Box 945160
Maitland, Florida 32794-5160
Attention: Corporate Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall
be sufficiently given or made if sent by first-class mail, postage
<PAGE> 35
prepaid, addressed (until another address is filed in writing with the
company) as follows:
First Union National Bank of North Carolina
230 South Tryon Street, 10th Floor
Charlotte, North Carolina 28288-1154
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of
certificates representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without
the approval of any holders of certificates representing shares of
Common Stock. From and after the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any time
period hereunder (which lengthening or shortening, following the first
occurrence of an event set forth in clause 13(i) and (ii) of the first
proviso to Section 23(a) hereof, shall be effective only if there are
Continuing Directors and shall require the concurrence of a majority
of such Continuing Directors, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying
the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or
amendment shall be made which changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of one
one-thousandths of a share of Preferred Stock for which a Right is
exercisable. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
<PAGE> 36
SECTION 27. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence
of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of the Continuing
Directors) shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein,
the concurrence of the Continuing Directors) or to the Company, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board (with, where specifically provided for herein, the concurrence
of the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders
of the Rights and all other parties, and (y) not subject the Board or
the Continuing Directors to any liability to the holders of the
Rights.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
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; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court
or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day
<PAGE> 37
following the date of such determination by the Board of Directors.
SECTION 31. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with the laws of such
State applicable to contracts made and to be performed entirely within
such State, except that the rights and obligations of the Rights Agent
shall be governed by the laws of the State of North Carolina.
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 eaning or construction of any of
the provisions hereof.
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.
Attest: DIXON TICONDEROGA COMPANY,
a Delaware corporation
By: By:
------------------------------- ----------------------------
Name:
As its:
------------------------
Attest: FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By: By:
------------------------------ ----------------------------
Name:
As:
----------------------------
<PAGE> 1
Exhibit 2
[Form of Rights Certificate]
Certificate No R- Rights
----
NOT EXERCISABLE AFTER MARCH 31, 2005 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF
SUCH AGREEMENT.]<F1>
Rights Certificate
Dixon Ticonderoga Company
This certifies that or registered assigns, is
the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of March 3, 1995 (the
"Rights Agreement"), between Dixon Ticonderoga Company, a Delaware
corporation (the "Company"), and First Union National Bank of North
Carolina, a United States banking corporation (the "Rights Agent"),
to purchase from the Company at any time prior to 5:00 P.M. (New York
City time) on March 31, 2005 at the office or offices of the Rights
Agent designated for such purpose or its successors as Rights Agent,
one one-thousandth of a fully paid, non-assessable share of Series A
Junior Preferred Stock, par value $1.00 per share (the "Preferred
Stock") of the Company, at a purchase price of $30.00 per one one-
thousandth of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to
Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase
Price as of March 3, 1995 based on the Preferred Stock as constituted
at such date. The Company reserves the right to require prior to the
occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
<F1>The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE> 2
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person which, after such transfer,
became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from
and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other
securities, which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the
Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of
the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-thousandth of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to
purchase. If this Rights Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company
at its option at a redemption price of $.01 per Right. In
addition, the Rights may be exchanged, in whole or in part, for
shares of the Common Stock, or shares of preferred stock of the
Company having essentially the same value or economic rights as
such shares. Immediately upon the action of the Board of Directors
<PAGE> 3
of the Company authorizing any such exchange, and without any
further action or any notice, the Rights (other than Rights which
are not subject to such exchange) will terminate and the Rights
will only enable holders to receive the shares issuable upon such
exchange. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem the Rights shall require the
concurrence of a majority of the Continuing Directors.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depository receipts), but in lieu thereof
a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the holder
of shares of Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders
at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
<PAGE>
WITNESS the signature of the proper officers of the
Company and its corporate seal.
Dated as of
_________________________
Attest: DIXON TICONDEROGA COMPANY
By: By:
-------------------------- -------------------------
Secretary Title:
-----------------------
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:
--------------------------
Title:
-----------------------
<PAGE> 4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
- ---------------------------------------------------------------------
hereby sells, assigns and transfer unto
-------------------------
- ---------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within Rights
Certificate on the books of the within named Company, with full
power of substitution.
Dated:
------------------ -----------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
------------------ -----------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement
or any change whatsoever.
<PAGE> 5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: DIXON TICONDEROGA COMPANY:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered
to:
Please insert social security
or other identifying number
- ------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for
the balance of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
- ------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------
Dated:
------------------ -----------------------------
Signature
Signature Guaranteed:
<PAGE> 6
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or became an
Acquiring person or an Affiliate or Associate of an Acquiring
Person.
Dated:
------------------ -----------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE> 7
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED STOCK
On March 3, 1995, the Board of Directors of Dixon
Ticonderoga Company (the "Company") declared a dividend
distribution of one Right for each outstanding share of Common
Stock, $1.00 par value (the "Common Stock"), of the Company to the
stockholders of record on March 31, 1995 (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Junior Preferred Stock,
$1.00 par value of the Company (the "Preferred Stock"), at a
Purchase Price of $30.00 per one one-thousandth of a share (the
"Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in the Rights Agreement (the
"Rights Agreement"), dated as of March 3, 1995, between the
Company and First Union National Bank of North Carolina, a United
States banking corporation, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate Rights Certificate will be distributed. The Rights will
separate from the Common Stock and a Distribution Date will occur
upon the earlier of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date") or (ii) 10 business
days (or such later date as may be determined by the Board of
Directors) following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning
30% or more of such outstanding shares of Common Stock. The term
"Acquiring Person") specifically excludes (i) the Company, (ii) any
Subsidiary (as such term is defined in the Rights Agreement) of the
Company, (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company, (iv) any person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan, (v) any Exempt Person (as such term is
defined in the Rights Agreement), (vi) the Gino N. Pala Family
Members (as such term is defined in the Rights Agreement) as long
as the Gino N. Pala Family Members own in the aggregate less than
30% of the outstanding shares of Common Stock of the Company, or
(vii) any person who or which would be an Acquiring Person solely
by reason of (A) being the beneficial owner of shares of Common
Stock, the beneficial ownership of which was acquired by such
person pursuant to a transaction or series of related transactions
approved by the Continuing Directors (as such term is defined in
the Rights Agreement) of the Company before such person otherwise
became an Acquiring Person or (B) any other action or transaction
which the Continuing Directors of the Company determines should
not, consistent with the purposes of the Rights Agreement, cause
such person to be deemed an Acquiring Person, which determination
is made prior to such person otherwise becoming an Acquiring
Person. Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred
with and only with such Common Stock certificates, (ii) new Common
Stock certificates will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
<PAGE> 8
certificates for Common Stock outstanding will also constitute the
transfer of the Rights associated with the Common Stock represented
by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on March 31, 2005,
unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the Board
of Directors, only shares of Common Stock prior to the Distribution
Date will be issued with Rights.
In the event that any person becomes an Acquiring Person
unless such acquisition is made pursuant to a tender or exchange
offer for all outstanding shares of the Company, at a price
determined by a majority of the independent Directors of the
Company who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person to be fair and otherwise in the
best interest of the Company and its stockholders), each holder of
a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other
securities of the Company), having a value equal to two times the
exercise price of the Right. The exercise price is the Purchase
Price subject to adjustment in accordance with the terms of the
Rights Agreement. Notwithstanding any of the foregoing, following
the occurrence of the event set forth in this paragraph (the "Flip-
In Event"), all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not
exercisable following the occurrence of the Flip-in Event set forth
above until such time as the Rights are no longer redeemable by the
Company as set forth below.
In the event that following the Stock Acquisition Date,
(i) the Company is acquired in a merger or consolidation in which
the Company is not the surviving corporation (other than a merger
that follows a tender offer determined to be fair to the
stockholders of the Company, as described in the preceding
paragraph) or (ii) 50% or more of the Company's assets or earning
power is sold or transferred, each holder of a Right (except Rights
which have previously been voided as sat forth above) shall
thereafter have the right to receive, upon exercise of the Right,
Common Stock of the acquiring company having a value equal to two
times the exercise price of the Right.
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain
<PAGE> 9
rights or warrants to subscribe for Preferred Stock or convertible
securities at leas than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustments in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional Units will be issued
and, in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
At any time until 10 days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right. Under certain circumstances, the
decision to redeem will require the concurrence of a majority of
the Continuing Directors (as defined below). Immediately upon the
action of the Board of Directors ordering redemption of the Rights,
the Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 redemption price.
The term "Continuing Director" means any member of the
Board of Directors of the Company who was a member of the Board
prior to the date of the Rights Agreement and any person who is
subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person, or an affiliate or associate of an
Acquiring Person, or any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration)
of the Company as set forth above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board (in
certain circumstances, with the concurrence of the Continuing
Directors) in order to cure any ambiguity, to make changes which do
not adversely affect the interests of holders of Rights (excluding
the interest of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided, however, that
no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
<PAGE> 10
A copy of the Rights Agreement is being filed with the
SEC as an Exhibit to a Registration Statement on Form 8-A. A copy
of the Rights Agreement is available free of charge from the
Company. This Summary Description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
<PAGE> 1
Exhibit 3
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES A JUNIOR
PREFERRED STOCK
of
DIXON TICONDEROGA COMPANY
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned officers of Dixon Ticonderoga Company,
a corporation organized and existing under the General corporation Law
of the State of Delaware, in accordance with the provisions of Section
103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the
Board of Directors by the Restated Certificate of Incorporation of the
said Corporation, the said Board of Directors on March 3, 1995,
adopted the following resolution creating a series of 10,000 shares
of Preferred Stock designated as Series A Junior Preferred Stock:
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation in accordance with the
provisions of its Restated Certificate of Incorporation, a series of
Preferred Stock of the Corporation be and it hereby is created, and
that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of
such series shall be designated as "Series A Junior Preferred Stock"
and the number of shares constituting such series shall be 10,000.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) The holders of shares of Series A Junior Preferred
Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Junior Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, par
<PAGE> 2
value $1.00 per share, of the Corporation (the "Common Stock") since
the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a shore of Series A Junior
Preferred Stock. In the event the Corporation shall at any time after
March 3, 1995 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount to which holders of shares of Series A Junior
Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Preferred Stock as provided in
Section 2 (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Junior Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series A Junior Preferred Stock, unless the date of
issue of such Shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares,
or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders of
shares of Series A Junior Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by- share basis among
all ouch shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of Series
A Junior Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than
30 days prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of
Series A Junior Preferred Stock shall have the following voting
rights:
<PAGE> 3
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of shares of
Series A Junior Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A Junior
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(D) Except as set forth herein or as otherwise provided by
law, holders of Series A Junior Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on
shares of Series A Junior Preferred Stack outstanding shall have been
paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dis- solution or winding up) to the
Series A Junior Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either an
to dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Preferred Stock, except dividends paid ratably on the
Series A Junior Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Preferred Stock, provided that the Corporation may at
<PAGE> 4
any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for Shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Junior Preferred Stock, or any
shares of stock ranking on a parity with the Series A Junior Preferred
Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
Subsection (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A
Junior Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and canceled
promptly after the acqui- sition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth
herein, in the Corporation's Restated Certificate of Incorporation or
in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution shall
be made to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Preferred Stock unless, prior thereto, the holders of
shares of Series A Junior Preferred Stock shall have received
distributions in an amount equal to the Purchase Price (as that term
is defined in the Rights Agreement providing for the issuance of the
Series A Junior Preferred Stock) thereof, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series
A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Junior Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall have
received an amount Per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference
by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
<PAGE> 5
recapitalizations with respect to the common Stock) (such number in
clause (ii), the "Adjustment Number"). Following the payment of the
full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A Junior
Preferred Stock and Common Stock, respectively, holders of Series A
Junior Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets
to be distributed in the ratio of the Adjustment Number to 1 with
respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series A
Junior Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Junior
Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1,000 times the aggregate
amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Junior Preferred Stock
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
<PAGE> 6
SECTION 8. NO REDEMPTION. The shares of Series A Junior
Preferred Stock shall not be redeemable.
SECTION 9. RANK. The Series A Junior Preferred Stock shall
rank, with respect to the payment of dividends and the distribution
of assets, junior to all series of any other class of the
Corporation's Preferred Stock.
SECTION 10. AMENDMENT. The Restated Certificate of
Incorporation of the Corporation shall not be further amended in any
manner which would materially alter or change the powers, preferences
or special rights of the Series A Junior Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of
a majority or more of the outstanding shares of Series A Junior
Preferred Stock, voting separately as a class.
SECTION 11. FRACTIONAL SHARES. Series A Junior Preferred
Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holders fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Junior
Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties
of perjury this 24th day of February, 1995.
Attest: DIXON TICONDEROGA COMPANY
- ----------------------------- By:
Secretary -------------------------------
As:
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