SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
KYSOR INDUSTRIAL CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN NO. 38-1909000
(State of incorporation or organization) (IRS Employer
Identification No.)
ONE MADISON AVENUE
CADILLAC, MICHIGAN 49601
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
<S> <C> <C>
Common Share Purchase Rights New York Stock Exchange, Inc.
</TABLE>
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
Item 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On April 26, 1996, the Board of Directors of Kysor Industrial
Corporation (the "Company") declared a dividend of one common stock
purchase right (the "Rights") on each outstanding share of common stock, $1
par value (the "Common Shares"), of the Company for shareholders of record
on May 17, 1996. Each Right will entitle the holder thereof until May 16,
2006 (or, if earlier, until the redemption of the Rights) to buy one Common
Share at an exercise price of $100, subject to certain antidilution
adjustments. The Rights will be represented by certificates for Common
Shares and will not be exercisable or transferable apart from the Common
Shares until the earlier of (i) the tenth day after the public announcement
that a person or group has acquired beneficial ownership of 20% or more of
the Common Shares (such person being referred to herein as an "Acquiring
Person") or (ii) the tenth day after a person or group commences, or
announces an intention to commence, a tender or exchange offer the
consummation of which would give such person or group beneficial ownership
of 30% or more of the Common Shares (the earlier of such dates being
referred to herein as the "Distribution Date"). The Company's employee
benefit plans, including its Employee Stock Ownership Plan, are excluded
from the Rights Plan. Separate certificates representing the Rights will
be mailed to record holders of the Common Shares as of the Distribution
Date. The Rights will first become exercisable on the Distribution Date,
unless earlier redeemed, and could then begin trading separately from the
Common Shares. Until a right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including the right to
vote or to receive dividends. State Street Bank & Trust Company (North
Quincy, Massachusetts), a Massachusetts Corporation ("State Street"), is
the Rights Agent.
In the event that the Company is a party to a merger or other
business combination transaction or in the event 50% or more of the
Company's assets or earning power is sold, each Right will entitle its
holders to purchase, at the then exercise price of the Rights, that number
of common shares of the surviving company which at the time of such
transaction would have a market value of two times the then exercise price
of the Rights. Alternatively, if a 20% holder were to acquire the Company
by means of a reverse merger in which the Company and its stock survive, or
were to engage in certain "self-dealing" transactions, or were to acquire
40% of the then outstanding Common Shares (except pursuant to an offer for
all outstanding Common Shares satisfying the terms of the Rights
Agreement), each Right not owned by the 20% holder would become exercisable
for the number of Common Shares which, at that time, would have a market
value of two times the then exercise price of the Right.
The Rights are redeemable at a price of $.01 per Right at any
time prior to the thirtieth day after the date that a person or group has
acquired beneficial ownership of 20% or more of the Common Shares. Under
certain circumstances set forth in the Rights Agreement, the decision to
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redeem shall require the concurrence of a majority of the Disinterested
Directors. The term "Disinterested Directors" means any member of the
Board of Directors 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
Disinterested Directors. Disinterested Directors do not include an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement), or any representative of
the foregoing entities. After the redemption period has expired, the right
to redeem may be reinstated if an Acquiring Person reduces his ownership of
Common Shares to 10% or less of the then outstanding Common Shares in one
or more transactions not involving the Company. Immediately upon the
action of the Board of Directors ordering redemption of the Rights, with,
if required, the concurrence of a majority of the Disinterested Directors,
and unless reinstated, the Rights will terminate and thereafter the only
right of the holders of Rights will be to receive the redemption price.
The Rights will expire on May 16, 2006 (unless earlier redeemed).
The purchase price payable, and the number of Common Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) as a result of the grant to
holders of the Common Shares of certain rights or warrants to subscribe for
the Common Shares or convertible securities at less than the current market
price of the Common Shares or (iii) as a result of the distribution to
holders of the Common Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends at a rate not in excess of 125%
of the last cash dividend theretofore paid or dividends payable in Common
Shares) or of subscription rights or warrants (other than those referred to
above). With certain exceptions, no adjustment in the purchase price will
be required until cumulative adjustments require an adjustment of at least
1% in such purchase price.
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 Disinterested Directors) in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights,
or to shorten or lengthen any time period under the Rights Agreement, so
long as no amendment to adjust the time period governing redemption shall
be made at a time when the Rights are not redeemable.
As of April 26, 1996, there were 5,772,069 outstanding Common
Shares and 2,850,382 shares reserved for issuance pursuant to the Company's
stock option plans and conversion of Preferred shares. One Right will be
distributed to shareholders of the Company for each Common Share owned of
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record by them on May 17, 1996. As long as the Rights are attached to the
Common Shares, the Company will issue one Right with each new Common Share
so that all such shares will have attached Rights. The Company's Board of
Directors has reserved for issuance upon exercise of the Rights
approximately 8,622,451 Common Shares.
The Rights have certain antitakeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
the Company on terms not approved by its Board of Directors, except
pursuant to an offer conditioned on the Rights being redeemed. The Rights
should not interfere with any merger or other business combination approved
by the Board of Directors prior to the time that a person or group has
acquired beneficial ownership of 20% or more of the Common Shares since the
Rights may be redeemed by the Company at $.01 per Right prior to such time.
The Rights Agreement, dated as of April 26, 1996, between the
Company and State Street, as Rights Agent, specifying the terms of the
Rights (which includes as exhibits the form of Right Certificate and the
Summary of Rights to Purchase Common Shares), and a letter to the holders
of the Company's Common Shares, dated April 26, 1996, explaining the
Rights, are attached hereto as exhibits and are incorporated herein by
reference. The foregoing description of the Rights is qualified by
reference to such exhibits.
Item 2. EXHIBITS
99(a)
Rights Agreement, dated as of April 26, 1996, between Kysor
Industrial Corporation and State Street Bank & Trust Company, which
includes the form of Rights Certificate as Exhibit A and the Summary of
Rights to Purchase Common Shares as Exhibit B. Pursuant to the Rights
Agreement, printed Rights Certificates will not be mailed until as soon as
practicable after the earlier of the tenth day after public announcement
that a person or group has acquired beneficial ownership of 20% or more of
the Common Shares or the tenth day after a person commences or announces
its intention to commence a tender or exchange offer for 30% or more of the
Common Shares.
99(b)
Form of letter to holders of Common Shares of Kysor Industrial
Corporation, dated on or about April 26, 1996.
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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.
Dated: May 1, 1996 KYSOR INDUSTRIAL CORPORATION
By /s/ TERRY M. MURPHY
Terry M. Murphy
Its Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT DOCUMENT
99(a) Rights Agreement, dated as of April 26, 1996, between Kysor
Industrial Corporation and State Street Bank & Trust Company,
which includes the form of Rights Certificate as Exhibit A and
the Summary of Rights to Purchase Common Shares as Exhibit B.
Pursuant to the Rights Agreement, printed Rights Certificates
will not be mailed until as soon as practicable after the
earlier of the tenth day after public announcement that a
person or group has acquired beneficial ownership of 20% or
more of the Common Shares or the tenth day after a person
commences or announces its intention to commence a tender or
exchange offer for 30% or more of the Common Shares.
99(b) Form of letter to holders of Common Shares of Kysor Industrial
Corporation, dated on or about April 26, 1996.
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EXHIBIT 99(a)
___________________________________________________________________________
KYSOR INDUSTRIAL CORPORATION
and
STATE STREET BANK & TRUST CO.
Rights Agent
Rights Agreement
Dated as of April 26, 1996
___________________________________________________________________________
RIGHTS AGREEMENT
Agreement, dated as of April 26, 1996, between KYSOR INDUSTRIAL
CORPORATION, a Michigan corporation (the "Company"), and STATE STREET BANK
& TRUST CO., a Massachusetts corporation (the "Rights Agent").
P R E A M B L E
The Board of Directors of the Company has authorized and declared
a dividend of one common share purchase right (the "Rights") on each share
of common stock, $1 par value, of the Company (the "Common Shares")
outstanding on May 17, 1996 (the "Record Date"), and has authorized the
issuance of one Right with respect to each Common Share that shall become
outstanding between May 17, 1996, and the earlier of the Distribution Date
or the Expiration Date (as such terms are defined in Sections 3 and 7
hereof), each Right representing the right to purchase one Common Share.
ACCORDINGLY, in consideration of the premises and the mutual
agreements herein set forth, THE PARTIES HEREBY AGREE AS FOLLOWS:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 20% or more
of the Common Shares then outstanding, but shall not include the Company,
any wholly owned subsidiary of the Company or any employee benefit plan of
the Company or any subsidiary of the Company or an entity holding Common
Shares for or pursuant to the terms of any such employee benefit plan.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on April 26, 1996.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, 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 (other than the Rights that are subject to this
Agreement), warrants or options, or otherwise; PROVIDED, HOWEVER, that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Association until such tendered securities are accepted for
purchase or exchange;
(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 "beneficial ownership" (as determined pursuant to Rule 13d-3 of
the General Rules of Regulations under the Exchange Act) of (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 an agreement, arrangement
or understanding to vote such security if such agreement, arrangement
or understanding (A) arises solely from a revocable proxy given in
response to a proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act (the "Rules"), or (B) is made in
connection with, or is to otherwise participate in, a proxy or consent
solicitation made, or to be made, pursuant to, and in accordance with,
the applicable provisions of the Rules, in either case described in
clause (A) or (B) above, whether or not such agreement, arrangement or
understanding is also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (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 as set forth in
clauses (A) or (B) as described in the proviso to subparagraph (ii) of
this paragraph (c)) or disposing of any voting securities of the
Company.
Notwithstanding the foregoing, an agreement, arrangement or
understanding (whether or not in writing), or any communications or
discussions, among two or more Persons with respect to any matter
relating to the management, operation or conduct of the business of
the Company, and including discussing or agreeing on, or communicating
with respect to, a position with respect to any such matter and
communicating such discussion, communication, agreement or position to
other Persons including shareholders of the Company or to the Company
shall not constitute an "agreement, arrangement or understanding" for
purposes of this Section 1(c).
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the state of the
principal office of the Rights Agent are authorized or obligated by law or
executive order to close.
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(e) "Close of business" on any given date shall mean 5:00 p.m.,
local time in the city of the principal office of the Rights Agent, on such
date; PROVIDED, HOWEVER, that if such date is not a Business Day, it shall
mean 5:00 p.m., local time in such state, on the next succeeding Business
Day.
(f) "Common Shares" when used with reference to the Company
shall mean the Common Shares, $1.00 par value, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned
Person.
(g) "Disinterested Director" shall mean (i) any member of the
Board of Directors 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
Affiliate or Associate thereof, 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 Affiliate or Associate
thereof, if such Person's nomination for election or election to the Board
is recommended or approved by a majority of the Disinterested Directors.
(h) "Person" shall mean any individual, firm, corporation,
association, partnership, joint-venture, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(i) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such (including the first date on which any filing with
any governmental authority disclosing that an Acquiring Person has become
such is made available to the public).
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 Shares) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earlier of
(i) the tenth day after the Shares Acquisition Date or (ii) the tenth day
after the date of the commencement of, or first public announcement of the
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intent of any Person (other than the Company, any wholly owned subsidiary
of the Company or any employee benefit plan of the Company or of any
subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such employee benefit plan) to commence, a
tender or exchange offer the consummation of which would result in
beneficial ownership by a Person of 30% or more of the outstanding Common
Shares (including any such date which is after the date of this Agreement
and prior to the issuance of the Rights; the earlier of such dates being
herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for Common Shares registered in the names of the holders
thereof (which certificates for Common Shares shall also be deemed to be
Rights Certificates) and not by separate Rights Certificates, and (y) the
right to receive Rights Certificates will be transferable only in
connection with the transfer of Common Shares. 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 Common Shares as of
the close of business on the Distribution Date, at the address of such
holder shown on the records of the Company, a Rights Certificate, in
substantially the form of Exhibit A hereto (the "Rights Certificate"),
evidencing one Right for each Common Share so held, subject to adjustment
as provided herein. As of the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) On May 17, 1996, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common Shares,
in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of
Common Shares as of the close of business on May 17, 1996, at the address
of such holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of May 17, 1996, until the
Distribution Date, the Rights will be evidenced by such certificates for
Common Shares registered in the names of the holders thereof (together with
a copy of the Summary of Rights). Until the Distribution Date (or, if
earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on May 17, 1996, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares issued after May 17, 1996,
but prior to the earlier of the Distribution Date or the Expiration Date
(as such terms are defined in this Section 3 and Section 7 hereof) shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Kysor
Industrial Corporation (the "Company") and State Street Bank &
Trust Co. (the "Rights Agent") dated as of April 26, 1996 (the
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"Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement after
receipt of a written request therefor. Under certain
circumstances, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person (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 Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
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 A hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. 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 Common Shares as shall be set forth
therein at the price set forth therein (the "Purchase Price"), but the
number and type of securities purchasable upon the 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
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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 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. The Rights
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, President or any Vice President, either manually or by facsimile
signature, and have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary
of the Company, either manually or by facsimile signature. The 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 Certificate may be signed on
behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of 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, each Rights Certificate's
number, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
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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 earlier of the Expiration
Date or the Final Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of Common Shares (or, following an event described
in Section 11(a)(ii) or Section 13(a) hereof, preferred stock, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or Rights Certificates surrendered then entitled to such holder
to purchase. Any registered holder desiring to transfer, split up, combine
or exchange any Rights Certificate or Rights Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. 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) and Section 7(e) hereof,
countersign and deliver to the person entitled thereto a Rights Certificate
or Rights Certificates, as the case may be, as so requested. The Company
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(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 (which may include a surety bond)
reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will make
and deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed, or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) 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 11(a)(iii) and Section 23(a) hereof)
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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, to the Rights Agent
at the principal office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each Common Share as to
which the Rights are exercised, at or prior to the earlier of (i) the close
of business on May 16, 2006 (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 Common Share pursuant to the
exercise of a Right shall initially be $100, shall be subject to adjustment
from time to time as provided in Section 11 and Section 13 hereof and shall
be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment of the Purchase Price for
the Common Shares (or other shares, securities or property, as the case may
be) to be purchased and an amount equal to any applicable transfer tax in
cash, or by certified check or bank draft payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) requisition from any
transfer agent of the Common Shares (or make available, if the Rights Agent
is the transfer agent) certificates for the number of Common Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, (ii) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14, (iii) promptly after receipt of such
certificates, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered
holder of such Rights Certificate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Rights Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of an event described in
Section 11(a)(ii), 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 Affiliate) who becomes
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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 any
holder of such Rights shall thereupon have no 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 shall have no liability to any holder of Rights Certificates or any
other Person as a result of its 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
to any of its agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company other than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF COMMON SHARES.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Common
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Shares or any authorized and issued Common Shares held in its treasury, the
number of Common Shares that will be sufficient to permit the exercise in
full of all outstanding Rights.
(b) So long as the Common Shares issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(d) 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 or of any Common Shares (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
issuance or delivery of certificates for the Common Shares (or other
securities, as the case may be) in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered
for exercise or to issue or deliver any certificates for Common Shares (or
other securities, as the case may be) upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by the holder
of such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
SECTION 10. COMMON SHARES RECORD DATE. Each person in whose name any
certificate for Common Shares (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 the Common Shares (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 any applicable
transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Common Shares (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
on, and such certificate shall be dated, the next succeeding business day
on which the Common Shares (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 shareholder of the Company with respect to
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shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number 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 Common
Shares payable in Common Shares, (B) subdivide the outstanding
Common Shares, (C) combine the outstanding Common Shares into a
smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Common Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the time
of the record date for such dividend or on the effective date of
such subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date, shall
be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Common Shares transfer books of the 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 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).
(ii) In the event
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the
date of this Agreement, directly or indirectly, (1) shall
merge into the Company or otherwise combine with the Company
and the Company shall be the continuing or surviving
corporation of such merger or combination and the Common
Shares of the Company shall remain outstanding and not
changed into or exchanged for stock or other securities of
any other Person or the Company or cash or any other
property, (2) shall, in one or more transactions, other than
-11-
in connection with the exercise of Rights or in connection
with the exercise or conversion of securities exchangeable
or convertible into capital stock of the Company or any of
its subsidiaries, transfer any assets to the Company or any
of its subsidiaries in exchange (in whole or in part) for
shares of any class of capital stock of the Company or any
of its subsidiaries or for securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its subsidiaries or otherwise obtain from
the Company or any of its subsidiaries, with or without
consideration, any additional shares of any class of capital
stock of the Company or any of its subsidiaries or
securities exercisable for or convertible into shares of any
class of capital stock of the Company or any of its
subsidiaries (other than as part of a pro rata distribution
to all holders of Common Shares), (3) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise
dispose (in one or more transactions), to, from or with, as
the case may be, the Company or any of its subsidiaries,
assets, including securities, on terms and conditions less
favorable to the Company than the Company would be able to
obtain in arm's-length negotiation with an unaffiliated
third party, (4) shall receive any compensation from the
Company or any of the Company's subsidiaries other than
compensation for full-time employment as a regular employee
at rates in accordance with the Company's (or its
subsidiaries') past practices, or (5) shall receive the
benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its
subsidiaries, or
(B) during such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization of
the Company, or any merger or consolidation of the Company
with any of its subsidiaries or any other transaction or
series of transactions involving the Company or any
subsidiaries of the Company (whether or not with or into or
otherwise involving an Acquiring Person) which has the
effect, directly or indirectly, of increasing by more than
1% of the proportionate share of the outstanding shares of
any class of equity securities or of securities exercisable
for or convertible into equity securities of the Company or
any of its subsidiaries which is directly or indirectly
owned by any Acquiring Person or any Associate or Affiliate
of any Acquiring Person, or
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(C) 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), alone or
together with its Affiliates and Associates, shall, at any
time after the date of this Agreement, become the Beneficial
Owner of 40% or more of the Common Shares then outstanding,
unless the event causing the 40% threshold to be crossed is
a transaction set forth in Section 13(a) hereof, or is an
acquisition of Common Shares pursuant to a tender offer or
exchange offer made pursuant to Schedule 14D-1 (or any
successor form) filed with the Securities and Exchange
Commission for all outstanding Common Shares (other than
Shares held by the Person making the offer, or any Affiliate
or Associate of such Person) at a price and on terms
determined in good faith by at least a majority of the
Disinterested Directors who are not officers of the Company
to be (a) at a price which is fair to shareholders (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 shareholders,
then, and in each such case, proper provision shall be made so that each
holder of a Rights Certificate (except as provided below and in Section
7(e) hereof), shall thereafter have a right to receive, upon exercise
thereof at the then-current Purchase Price in accordance with the terms of
this Agreement, such number of Common Shares of the Company as shall equal
the result obtained by (x) multiplying the then-current Purchase Price by
the number of Common Shares for which a Rights Certificate is then
exercisable and dividing that product by (y) 50% of the current per share
market price of the Common Shares (determined pursuant to Section 11(d)) on
the fifth day after the earlier of the date of the occurrence or the date
of the first public announcement of any one of the events listed above in
this subparagraph (ii) (such number of shares being referred to as the
"Adjustment Shares"), PROVIDED, HOWEVER, that if the adjustment is also
subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to
this Section 11(a)(ii). Notwithstanding the foregoing, upon the occurrence
of any of the events listed above in this paragraph (ii), any Rights that
are or were on or after the earlier of the Distribution Date or Shares
Acquisition Date beneficially owned by the Acquiring Person or any
Associate or Affiliate of the Acquiring Person shall become void and any
holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Agreement. The Company shall not enter
into any transaction of the kind listed in this subparagraph (ii) if at the
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time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements in effect which, as a result of
the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. Any Rights
Certificate issued pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person or any Associate or Affiliate
thereof and any Rights Certificate issued at any time upon the transfer of
any Rights to an Acquiring Person or any Associate or Affiliate thereof or
to any nominee of such Acquiring Person, Associate or Affiliate, and any
Rights Certificate issued pursuant to Section 6 or this Section 11 upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain the legend set
forth in Section 4(b) hereof.
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if two-thirds of the
Disinterested Directors determine that such action is necessary or
appropriate and not contrary to the interest of holders of Rights
(and, in the event that the number of Common Shares which are
authorized by the Company's articles 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
excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value"), over (2) the Purchase Price
(such excess, the "Spread") and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company has deemed
to have the same value as Common Shares (such shares of preferred
stock, "common share 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, where such
aggregate value has been determined by the Board of Directors of the
Company based upon the advice of a recognized expert selected by the
Board of Directors of the Company; PROVIDED, HOWEVER, 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 the
first occurrence of an event described in Section 11(a)(ii) hereof or
the first date that the right to redeem the Rights pursuant to
Section 23 hereof, as such date may be amended pursuant to Section 26
hereof, shall expire, then the Company shall be obligated to deliver,
upon the surrender of exercise of a Rights Certificate and without
requiring payment of the Purchase Price, Common Shares (to the extent
available) and then, if necessary, cash, securities and/or assets that
in the aggregate are equal to the Spread. If the Board of Directors
-14-
of the Company shall determine in good faith that it is likely that
sufficient additional Common Shares 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 following the first occurrence of an event described
in Section 11(a)(ii) hereof, in order that the Company may seek
shareholder approval for the authorization of such additional shares
(such period as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action is to be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
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 the
Common Shares shall be the current per share market price of Common
Shares (as determined pursuant to Section 11(d) hereof) on the later
of the date of the first occurrence of an event described in
Section 11(a)(ii) hereof and the first date that the right to redeem
the Rights pursuant to Section 23 hereof, as such date may be amended
pursuant to Section 26 hereof, shall expire and the value of any
"common share equivalents" shall be deemed to have the same value as
the Common Shares on such date.
(b) In the event the Company shall fix a record date for the
issuance of rights or warrants to all holders of Common Shares entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Common Shares (or securities convertible into
Common Shares) at a price per Common Share (or having a conversion price
per Common Share, if a security convertible into Common Shares) less than
the current per share market price of the Common Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Common Shares outstanding on such
record date plus the number of Common Shares which the aggregate offering
price of the total number of Common Shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Common Shares outstanding on such record date
plus the number of additional Common Shares to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
-15-
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Common Shares owned by or held
for the account of 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 the event the Company shall fix a record date for the
making of a distribution to all holders of the Common Shares (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of evidences
of indebtedness or assets (other than a regular periodic cash dividend at a
rate not in excess of 125% of the rate of the last regular periodic cash
dividend theretofore paid or a dividend payable in Common Shares) or
subscription rights or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current
per share market price of the Common Shares (as defined in Section 11(d))
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 assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Common Share and the
denominator of which shall be such current per share market price of the
Common Shares (as defined in Section 11(d)). Such adjustments shall be
made successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current per
share market price" of the Common Shares on any date shall be deemed to be
the average of the daily closing prices per Common Share for the thirty
(30) consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current per share market price"
of the Common Shares on any date shall be deemed to be the average of the
daily closing prices per Common Share for ten (10) consecutive Trading Days
(as such term is hereinafter defined) immediately following such date;
PROVIDED, HOWEVER, that in the event that the current per share market
price of the Common Shares is determined during a period following the
announcement by the issuer of such Common Shares of (i) a dividend or
distribution on such Common Shares payable in such Common Shares or
-16-
securities convertible into such Common Shares (other than the Rights which
are the subject of this Agreement) or (ii) any subdivision, combination or
reclassification of such Common Shares, and prior to the expiration of
thirty (30) Trading Days or ten (10) Trading Days, as set forth above,
after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in
each such case, the "current per share market price" shall be appropriately
adjusted to 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 New York Stock Exchange or, if the Common
Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Common Shares are listed or admitted to
trading or, if the Common Shares are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system
then in use, or, if on any such date the Common Shares are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Shares selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good faith by the Board
of Directors of the Company shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
Common Shares are listed or admitted to trading is open for the transaction
of business or, if the Common Shares are not listed or admitted to trading
on any national securities exchange, a Monday, Tuesday, Wednesday, Thursday
or Friday on which banking institutions in the State of Michigan are not
authorized or obligated by law or executive order to close. If the Common
Shares are not publicly held or not so listed or traded, "current per share
market price" shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such 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 Common Share as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
-17-
shall be made no later than the earlier of (i) three years from the date of
the transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Common Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Shares contained in Section
11(a), (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 Common Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Common
Shares purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the 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 Section 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 shares (calculated to the nearest ten-thousandth) obtained
by (i) multiplying (x) the number of shares covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for
any adjustment in the number of Common Shares issuable upon the exercise of
a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of Common Shares for
which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest 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
-18-
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 Common Shares issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Common
Shares issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Common Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the Common Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Common
Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver
to such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(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
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(i) consolidation or subdivision of the Common Shares, (ii) issuance wholly
for cash of any Common Shares at less than current per share market price,
(iii) issuance wholly for cash of any of Common Shares or securities which
by their terms are convertible into or exchangeable for Common Shares,
(iv) stock dividends, or (v) issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company
to holders of its Common Shares shall not be taxable to such shareholders.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the 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 Common Shares 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
Common Shares) in accordance with Section 25 hereof.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event that, following the Shares Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person and the Company shall not be the
continuing or surviving corporation of such consolidation or merger,
(y) any Person 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 Common Shares 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 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 Person or Persons, then, and in
each such case, proper provision shall be made so that: (i) each holder of
a Rights Certificate, 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, nonassessable and
freely tradeable Common Shares 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 Common Shares for which a Right is exercisable immediately prior to the
first occurrence of an event described in clauses (x), (y) or (z) of this
Section 13(a) (a "Section 13 Event") (or, if an event described in
Section 11(a)(ii) has occurred prior to the Section 13 Event, multiplying
the number of such Common Shares for which a Right was exercisable
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immediately prior to the first occurrence of such an event described in
Section 11(a)(ii) by the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which, following the
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 per
share market price (determined pursuant to Section 11(d)(i) hereof) per
Common Share 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
its Common Shares) 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 Common Shares thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or
consolidation; 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 Shares of such
Person are not at such time and have not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect subsidiary of another
Person the Common Shares of which are and have been so registered,
"Principal Party" shall refer to such other Person; and (2) in case such
Person is a subsidiary, directly or indirectly, of more than one Person,
the Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Shares having the greatest aggregate market value.
(c) After the Shares Acquisition Date, the Company shall not
consummate any such consolidation, merger, sale or transfer unless the
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Principal Party shall have a sufficient number of authorized Common Shares
which have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger 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
Exchange 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 an
event described in Section 11(a)(ii) hereof, the Rights which have not
theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights that would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purpose of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are
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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 upon exercise of the Rights or to distribute certificates which
evidence fractional shares. In lieu of fractional shares, the Company may
pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes of
this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any factional Rights or any
fractional shares upon exercise of a Right.
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 Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing
of any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and will be entitled to specific
performance of the obligations hereunder and will be entitled to injunctive
relief against actual or threatened violations of the obligations of any
Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of Rights that:
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(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accomplished
by a proper instrument of transfer and with the appropriate forms and
certificates fully executed; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Rights Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or the
associated Common Shares certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary.
(d) 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.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Common
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the
rights of a shareholder of the company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders
(except as provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
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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 other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim
of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon
any Rights Certificate or certificate for the Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged by the proper person or persons.
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 which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
(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
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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 proper 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 imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of
the Chairman of the Board, the President, a Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Sections 11 or 13 hereof or responsible
for the manner, method or amount of any such adjustment or the ascertaining
-26-
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 Common Shares to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Common Shares
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 one of the Chairman of the Board, the President, a Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer. 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 Rights 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 by or
omission of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified therein (which date shall
not be less than five Business Days after the date any such officer
actually receives such application, unless any such officer shall have
consent 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) No provision of this Agreement shall require the Rights
Agent to extend 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.
(i) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
-27-
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.
(j) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(k) If, with respect to any Rights 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 or transfer without first consulting the
Company.
(l) The Company hereby represents and warrants that the issuance
of the Rights has been validly authorized by all necessary corporate action
on the part of the Company, that upon issuance, the Rights will constitute
valid and binding obligations in accordance with and subject to the terms
of the Rights Agreement, and that upon issuance, the Company will have
compiled with all requirements set forth in the Securities Act of 1933 and
the Securities Exchange Act of 1934, and all rules and regulations
promulgated thereunder, and the Rights Agent shall not be liable in the
event that the statements and recitals contained in this Section 20(k)
shall be deemed to be inaccurate or untrue.
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 Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then
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the registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws
of the United States or of the State of Michigan (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 Michigan), in good standing,
having a principal office in the State of Michigan 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 $50 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares, 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 Certificate 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 per share 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.
SECTION 23. REDEMPTION. (a) The Board of Directors of the Company
may, at its option, at any time prior to (i) the close of business on the
earlier of the thirtieth day following the Shares Acquisition 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, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); 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 Disinterested Directors then in office and such authorization shall
require the concurrence of two-thirds of such Disinterested Directors:
-29-
(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) in a majority
of the directors in office at the commencement of such solicitation if any
Person who is a participant in such solicitation 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 an event described in Section 11(a)(ii)
or Section 13(a) hereof 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 Common
Shares not beneficially owned by such Person (or by its Affiliates or
Associates); PROVIDED FURTHER, however, that if, following the occurrence
of a Shares Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any event described in Section 11(a)(ii)
or Section 13(a) hereof, (i) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of Common Shares in one
transaction, or a series of transactions, not directly or indirectly
involving the Company or any of its subsidiaries, which did not result in
the occurrence of an event described in Section 11(a)(ii) or Section 13(a)
hereof such that such Person is thereafter a Beneficial Owner of 10% or
less of the outstanding Common Shares, and (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i),
who are Acquiring Persons, then the right of redemption shall be reinstated
and thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable following an adjustment made pursuant to
Section 11(a)(ii) prior to the expiration of the Company's right of
redemption hereunder. Neither the Board of Directors, the Disinterested
Directors nor the Company shall have any liability to any Person as a
result of the redemption of Rights pursuant to the terms hereof, other than
the obligation of the Company to pay $.01 per Right upon redemption.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. Within 10 days after the action of the
Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses
as they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the
Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
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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 (i) to pay any dividend payable in stock of any class to the
holders of Common Shares or to make any other distribution to the holders
of Common Shares (other than a regular periodic cash dividend at a rate not
in excess of 125% of the rate of the last regular periodic cash dividend
theretofore paid), or (ii) to offer to the holders of Common Shares rights
or warrants to subscribe for or to purchase any additional Common Shares or
shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding Common
Shares), or (iv) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) to, any other Person, or
(v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, in accordance with Section 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 Common Shares, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the record
date for determining holders of the Common Shares for purposes of such
action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) of
this Agreement shall occur, then, in any such case, the Company shall as
soon as practicable thereafter give to each holder of a Rights Certificate,
in accordance with Section 25 hereof, a notice of this 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.
(c) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a filing by the Company with the Securities
and Exchange Commission shall constitute sufficient notice to the holders
of securities of the Company, including the Rights, for purposes of this
Agreement and no other notice need be given.
-31-
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:
Kysor Industrial Corporation
One Madison Avenue
Cadillac, Michigan 49601
Attention: Vice President, General Counsel and Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
State Street Bank & Trust Co.
2 Heritage Drive
North Quincy, Massachusetts 02171
Attention: Trust Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
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 Common Shares. 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 shortening or lengthening shall be
effective only if there are Disinterested Directors and shall require the
concurrence of two-thirds of such Disinterested Directors if (A) such
supplement or amendment occurs on or after the time a Person becomes an
Acquiring Person, or (B) such supplement or amendment occurs on or after
the date of a change (resulting from a proxy or consent solicitation) in a
-32-
majority of the directors in office at the commencement of such
solicitation if any Person who is a participant in such solicitation has
stated (or, if upon the commencement of such solicitation, a majority of
the Board of Directors of the Company and 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 an event
described in Section 11(a)(ii) or Section 13(a) hereof 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 Common Shares not beneficially owned by such Person (or by
its Affiliates or Associates)), 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, HOWEVER, that 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 Common Shares 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
Shares.
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
Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of
which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act as in effect as of the date hereof. The
Board of Directors of the Company (and, where specifically provided for
herein, the Disinterested Directors) shall have the exclusive power and
-33-
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board, or the Company (or, where
specifically provided for herein, the Disinterested Directors), or as may
be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power of (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 (or,
where specifically provided for herein, by the Disinterested Directors) in
good faith (provided that the decision to redeem the rights shall be in the
sole discretion of the Board or where specifically provided for herein, by
the Disinterested Directors), shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights Certificates and
all other parties, and (y) not subject the Board or the Disinterested
Directors to any liability to the holders of the Rights Certificates.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, the Common Shares).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
SECTION 31. GOVERNING LAW. This Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Michigan and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
SECTION 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
-34-
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
Attest: KYSOR INDUSTRIAL CORPORATION
By /S/ MARY C. JANIK By /S/ TERRY M. MURPHY
Mary C. Janik Terry M. Murphy
Its Vice President and Chief
Financial Officer
Attest: STATE STREET BANK & TRUST CO.
By /S/ PATRICIA FOSTER By /S/ STEPHEN CESSO
Patricia Foster Stephen Cesso
Its Vice President State Street
Bank - Corporate Counsel
-35-
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER MAY 16, 2006, 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.]*
RIGHTS CERTIFICATE
KYSOR INDUSTRIAL CORPORATION
This certifies that _______________________, or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement dated as of April 26, 1996 (the
"Rights Agreement") between KYSOR INDUSTRIAL CORPORATION, a Michigan
corporation (the "Company"), and STATE STREET BANK & TRUST CO., a
Massachusetts corporation (the "Rights Agent'), to purchase from the
Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M. (Massachusetts time) on May 16,
2006, at the principal office of the Rights Agent, or its successors as
Rights Agent, one fully paid, nonassessable share of common stock (the
"Common Shares") of the Company, at a purchase price of $100 per share (the
"Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of
shares 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 May 17, 1996, based on the Common Shares as constituted at such
date.
_________________
*The portion of the legend in brackets shall be inserted only if
applicable.
As provided in the Rights Agreement, the Purchase Price and the
number of Common Shares which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the Rights, limitations of Rights, and the obligations,
duties and immunities hereunder of the Rights Agent, the Company and the
holders of the Rights Certificates. Copies of the Rights Agreement are on
file at the office of the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office of the Rights Agent,
may be exchanged for another Rights Certificate or Rights Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of Common Shares as the Rights evidenced by the
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 the redemption price of $.01 per Right. Under certain circumstances set
forth in the Rights Agreement, the decision to redeem shall require the
concurrence of two-thirds of the Disinterested Directors. After the
redemption period has expired, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial ownership to 10%
or less of the outstanding Common Shares in a transaction or series of
transactions not involving the Company.
No fractional Common Shares will be issued upon the exercise of
any Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a shareholder of the Company, including the right to
vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
-2-
affecting shareholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised as provided
in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of April 28, 1986.
ATTEST KYSOR INDUSTRIAL CORPORATION
______________________________ By ________________________________
Secretary
Its ____________________________
Countersigned:
STATE STREET BANK & TRUST CO.
By ________________________________
Its ____________________________
-3-
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED, _____________________________________________
hereby sells, assigns and transfers unto __________________________________
___________________________________________________________________________
(Please print name and address of transferee)
___________________________________________________________________________
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
________________________ Attorney, to transfer the Rights Certificate on
the books of the Company, with full power of substitution.
Dated: ________________, 19__
________________________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate ___ is ___ is not being sold,
assigned or transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement);
(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: _____________, 19___ ________________________________________
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.
-2-
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To Kysor Industrial Corporation:
The undersigned hereby irrevocably elects to exercise
________________________ Rights represented by this Rights Certificate to
purchase the Common Shares (or such other securities of the Company or of
any other person that may be issuable upon the exercise of the Rights)
issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
Please insert social security
or other identifying number:
___________________________________________________________________________
(Please print name and address)
___________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of
remaining 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: _______________, 19__
________________________________________
Signature
Signature Guaranteed:
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 in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___ did ___ did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: _______________, 19___ ________________________________________
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.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On April 26, 1996, the Board of Directors of Kysor Industrial
Corporation (the "Company") approved a Common Share Purchase Rights Plan.
Under the plan, one Common Share Purchase Right will attach to each
outstanding share of common stock, $1.00 par value (the "Common Shares"),
of the Company. Each Right entitles the registered holder to purchase from
the Company one Common Share at a price of $100 per share (the "Purchase
Price"), subject to adjustment. The record date for the Rights will be
May 17, 1996. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and Boston
EquiServe, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding Common Shares (the date on
which 20% or more of the outstanding Common Shares are acquired being known
as the "Shares Acquisition Date"), or (ii) 10 days following the
commencement or announcement of an intention to commence a tender or
exchange offer, the consummation of which would result in beneficial
ownership by a person of 30% or more of such outstanding Common Shares (the
earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced with respect to any of the Common Share certificates
outstanding as of May 17, 1996, by such Common Share certificates. The
Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. New Common Share
certificates issued after May 17, 1996, but prior to the Distribution Date
(or, if earlier, the redemption or expiration of the Rights), will contain
a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or, if earlier, the redemption or expiration of the
Rights), the surrender for transfer of any certificates for Common Shares
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificates. As soon as practicable after the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights. Except as otherwise
determined by the Board of Directors, only Common Shares issued prior to
the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 16, 2006, unless earlier redeemed by the Company
as described below.
The Purchase Price payable, and the number of Common Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of the Common Shares, (ii) upon the grant to holders of
the Common Shares of certain rights or warrants to subscribe for Common
Shares or convertible securities at less than the current market price of
the Common Shares or (iii) upon the distribution to holders of the Common
Shares of evidences of indebtedness or assets (excluding regular periodic
cash dividends out of earnings or retained earnings at a rate not in excess
of 125% of the rate of the last cash dividend theretofore paid or dividends
payable in Common Shares) or of subscription rights or warrants (other than
those referred to above).
In the event that, any time following the Shares Acquisition
Date, the Company were acquired in a merger or other business combination
transaction or in the event 50% or more of its assets or earning power were
sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock
of the acquiring company which at the time of such transaction would have a
market value of two times the exercise price of the Right. Alternatively,
in the event that, any time following the Distribution Date, the Company
were the surviving corporation in a merger and its Common Shares were not
changed or exchanged, or in the event that an Acquiring Person engages in
one of a number of self-dealing transactions specified in the Rights
Agreement, or in the event that an Acquiring Person becomes the beneficial
owner of more than 40% of the then outstanding Common Shares (except
pursuant to an offer for all outstanding Common Shares), proper provision
shall be made so that each holder of a Right, other than the Acquiring
Person (whose Rights will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares will be issued and in lieu
thereof, an adjustment in cash will be made based on the market price of
the Common Shares on the last trading date prior to the date of exercise.
At any time prior to the close of business on the thirtieth day
after the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). Under certain circumstances set forth in the Rights Agreement,
the decision to redeem shall require the concurrence of a majority of the
Disinterested Directors, which is defined to mean any member of the Board
of Directors 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 Disinterested
-2-
Directors. Disinterested Directors do not include an Acquiring Person, or
an affiliate or associate of an Acquiring Person, or any representative of
the foregoing entities. After the redemption period has expired, the right
to redeem may be reinstated if an Acquiring Person reduces his ownership of
Common Shares to 10% or less of the then outstanding Common Shares in one
or more transactions not involving the Company. Immediately upon the
action of the Board of Directors of the Company electing to redeem the
Rights, the Company shall make announcement thereof, and upon such
election, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to the shareholders or to
the Company, shareholders will recognize taxable income if the Rights are
redeemed and may, depending on the circumstances, recognize taxable income
when the Rights become exercisable or are exercised.
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 Disinterested Directors) in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights,
or to shorten or lengthen any time period under the Rights Agreement, so
long as no amendment to adjust the time period governing redemption shall
be made at a time when the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A. A copy of the Rights Agreement is available from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
-3-
EXHIBIT 99(b)
KYSOR INDUSTRIAL CORPORATION
One Madison Avenue, Cadillac, Michigan 49601-9785 Phone (616) 779-2200
FAX 616-775-2661/616-775-3950
OFFICE OF April 26, 1996
GEORGE R. KEMPTON
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
TO OUR SHAREHOLDERS:
Today, your Board of Directors renewed a Shareholder Rights Plan
to extend the Company's existing plan which will expire next month. Under
the new rights plan, which is virtually identical to the existing plan, one
common share purchase right will attach to each share of common stock
outstanding on May 17, 1996.
The concerns that caused the Board to adopt the Company's
original plan in 1986 were the same concerns that led the Board to extend
the plan, namely to continue the protection the plan affords against
abusive takeover tactics. These Rights were not adopted in response to any
specific takeover threat; however, the general level of takeover activity,
including hostile takeovers has significantly increased. Share purchase
rights are designed to assure that all of Kysor's shareholders receive fair
and equal treatment in any proposed takeover by guarding against abusive
tactics to gain control of the Company without paying all shareholders a
premium for that control.
These Rights will not prevent a legitimate takeover attempt but
will encourage anyone seeking to acquire the Company to negotiate with the
Board. Under such circumstances, the Board is provided greater flexibility
and time to enable all Kysor shareholders to realize the long-term value of
their investment in the Company should a change of control occur. More
than 1700 companies have adopted Share Purchase Rights Plans to protect
their shareholders against abusive acquisition tactics.
The Rights will be exercisable only if and when a situation
arises which they intended to address. In the meantime adoption of the
Plan does not weaken the financial strength of Kysor and has no dilutive
effect and will not affect reported earnings per share. The terms of the
Plan are further described in the enclosed summary which should be attached
to your stock certificate. The action by your Board reflects its
continuing concern that all of Kysor's shareholders continue to receive the
full value of their investment including its long-term value for future
growth.
Very truly yours,
/s/ George R. Kempton
George R. Kempton
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On April 26, 1996, the Board of Directors of Kysor Industrial
Corporation (the "Company") approved a Common Share Purchase Rights Plan.
Under the plan, one Common Share Purchase Right will attach to each
outstanding share of common stock, $1.00 par value (the "Common Shares"),
of the Company. Each Right entitles the registered holder to purchase from
the Company one Common Share at a price of $100 per share (the "Purchase
Price"), subject to adjustment. The record date for the Rights will be
May 17, 1996. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and Boston
EquiServe, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding Common Shares (the date on
which 20% or more of the outstanding Common Shares are acquired being known
as the "Shares Acquisition Date"), or (ii) 10 days following the
commencement or announcement of an intention to commence a tender or
exchange offer, the consummation of which would result in beneficial
ownership by a person of 30% or more of such outstanding Common Shares (the
earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced with respect to any of the Common Share certificates
outstanding as of May 17, 1996, by such Common Share certificates. The
Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. New Common Share
certificates issued after May 17, 1996, but prior to the Distribution Date
(or, if earlier, the redemption or expiration of the Rights), will contain
a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or, if earlier, the redemption or expiration of the
Rights), the surrender for transfer of any certificates for Common Shares
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificates. As soon as practicable after the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights. Except as otherwise
determined by the Board of Directors, only Common Shares issued prior to
the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 16, 2006, unless earlier redeemed by the Company
as described below.
The Purchase Price payable, and the number of Common Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of the Common Shares, (ii) upon the grant to holders of
the Common Shares of certain rights or warrants to subscribe for Common
Shares or convertible securities at less than the current market price of
the Common Shares or (iii) upon the distribution to holders of the Common
Shares of evidences of indebtedness or assets (excluding regular periodic
cash dividends out of earnings or retained earnings at a rate not in excess
of 125% of the rate of the last cash dividend theretofore paid or dividends
payable in Common Shares) or of subscription rights or warrants (other than
those referred to above).
In the event that, any time following the Shares Acquisition
Date, the Company were acquired in a merger or other business combination
transaction or in the event 50% or more of its assets or earning power were
sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock
of the acquiring company which at the time of such transaction would have a
market value of two times the exercise price of the Right. Alternatively,
in the event that, any time following the Distribution Date, the Company
were the surviving corporation in a merger and its Common Shares were not
changed or exchanged, or in the event that an Acquiring Person engages in
one of a number of self-dealing transactions specified in the Rights
Agreement, or in the event that an Acquiring Person becomes the beneficial
owner of more than 40% of the then outstanding Common Shares (except
pursuant to an offer for all outstanding Common Shares), proper provision
shall be made so that each holder of a Right, other than the Acquiring
Person (whose Rights will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares will be issued and in lieu
thereof, an adjustment in cash will be made based on the market price of
the Common Shares on the last trading date prior to the date of exercise.
At any time prior to the close of business on the thirtieth day
after the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). Under certain circumstances set forth in the Rights Agreement,
the decision to redeem shall require the concurrence of a majority of the
Disinterested Directors, which is defined to mean any member of the Board
of Directors 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
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person is recommended or approved by a majority of the Disinterested
Directors. Disinterested Directors do not include an Acquiring Person, or
an affiliate or associate of an Acquiring Person, or any representative of
the foregoing entities. After the redemption period has expired, the right
to redeem may be reinstated if an Acquiring Person reduces his ownership of
Common Shares to 10% or less of the then outstanding Common Shares in one
or more transactions not involving the Company. Immediately upon the
action of the Board of Directors of the Company electing to redeem the
Rights, the Company shall make announcement thereof, and upon such
election, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to the shareholders or to
the Company, shareholders will recognize taxable income if the Rights are
redeemed and may, depending on the circumstances, recognize taxable income
when the Rights become exercisable or are exercised.
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 Disinterested Directors) in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights,
or to shorten or lengthen any time period under the Rights Agreement, so
long as no amendment to adjust the time period governing redemption shall
be made at a time when the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A. A copy of the Rights Agreement is available from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
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