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
WINDMERE CORPORATION
(Exact name of registrant as specified in its charter)
Florida 59-1028301
(State of incorporation) (I.R.S. Employer
or organization) Identification No.)
5980 Miami Lakes Drive
Miami Lakes, Florida 33014
(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which each class
to be so registered is to be registered
Common Stock New York Stock Exchange
Purchase Rights
Securities to be registered pursuant to Section 12(g) of the Act:
(Title of class)
Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On March 6, 1995, the Board of Directors of Windmere
Corporation (the "Company") announced a dividend distribution of
one Right (a "Right") for each outstanding share of common stock,
$.10 par value (the "Common Stock"), of the Company to stockholders
of record at the close of business on March 1, 1995. Each Right
entitles the registered holder to purchase from the Company
one-quarter (.25) shares of Common Stock at a price of $25 per
share (the "Purchase Price"), subject to adjustment. The Purchase
Price shall be paid in cash. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and American Stock Transfer & Trust Company, as
Rights Agent. The material terms of the Rights Agreement are
summarized below.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate
from the Common Stock and a distribution of the Rights will occur
upon the earlier of (i) ten business days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock, (ii) ten business days after a person or
group of affiliated or associated persons has (x) become the direct
or indirect beneficial owner of at least 10% of the Company's
outstanding Common Stock, and (y) whose ownership interest is
deemed by the Board of Directors of the Company to cause a material
adverse impact on the business or prospects of the Company or its
shareholders (such persons or group hereinafter called an "Adverse
Person"), or (iii) ten business days following the commencement of
a tender offer or exchange offer that would result in a person or
group becoming an Acquiring Persons or an Adverse Person. Until
the date that the Rights are distributed (the "Distribution Date"),
(i) the Rights will be evidenced by the Common Stock certificates
and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the
date that the Rights Plan is adopted, will contain a notation
incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock
outstanding also will constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and
will expire ten years after the adoption of the Rights Plan, unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
If, following a person becoming an Acquiring Person or an
Adverse Person, (i) the Company shall consolidate with or merge
into any other person in which the Company is not the surviving
corporation, (ii) any other person shall merge into the Company and
all or part of the outstanding Common Stock shall be changed into
or exchanged for securities of any other person or cash or any
other property, or (iii) the Company sells 50% or more of its
assets or earning power, each Right then outstanding would "flip
over" and thereby would become a right to buy that number of shares
of Common Stock of the acquiring company which at the time of such
transaction has a market value of two times the exercise price of
the Right.
In the event a person becomes an Acquiring Person or an
Adverse Person (except pursuant to an offer for all outstanding
shares of Common Stock that is determined by the Board of Directors
to be fair to and otherwise in the best interest of the Company and
its Stockholders, a "Qualifying Tender Offer"), each Right then
outstanding would "flip in" and become a right to buy that number
of shares of Common Stock of the Company which at the time of such
acquisition would have a market value of two times the exercise
price of the Right. The acquiror who triggered the Rights would be
excluded from the "flip-in" because his Rights would have become
null and void upon his triggering acquisition.
In the event that the "flip in" is triggered, if there is not
sufficient authorized Common Stock available for issuance upon the
exercise of each Right or if the Board so elects, the Board may:
(i) seek shareholder approval to increase the number of authorized
shares of Common Stock or (ii) designate as issuable upon exercise
of the Rights such amount of Common Stock, cash, other equity or
debt securities, assets and/or other consideration as would be
equal to the value that would have been received if each Right had
received only Common Stock upon exercise.
At any time after a person becomes an Acquiring Person or an
Adverse Person and before the acquisition by a person or group of
50% or more of the outstanding Common Stock of the Company, the
board may exchange the Rights (other than Rights owned by such
person or group which have become void), in whole or in part, for
Common Stock at an exchange ratio of 1.56 shares of the Company's
Common Stock per Right, subject to adjustment.
At any time until ten days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.00001 per Right, payable in cash or shares of
Common Stock. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of
a majority of the Continuing Directors (as hereinafter defined).
After the redemption period has expired, the Company's rights of
redemption may be reinstated if the Acquiring Person or Adverse
Person reduces his or her beneficial ownership to less than 10% of
the outstanding shares of Common Stock in a transaction or series
of transactions not involving the Company. Immediately upon the
action of the Board of Directors ordering redemption of the Rights,
with, where required, the concurrence of the Continuing Directors,
the Rights will terminate and the only right which the holders of
Rights will thereafter have will be to receive the $.00001
redemption price.
The term "Continuing Directors" means any member of the Board
of Directors of the Company who was a member of the Board prior to
the date of the Rights Agreement, and any person who is
subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person or an Adverse Person, or an affiliate
or associate of an Acquiring Person or an Adverse Person, or any
representative or designee of the foregoing.
The Purchase Price payable, and the number of shares of Common
Stock 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 Stock, (ii) if holders of the
Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the current
market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional shares of Common Stock will
be issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Common Stock on the last trading
date prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The implementation of the rights plan will not interfere with
the day-to-day operations of the Company. The Rights Agreement
provides that the Company may not enter into any transaction of the
sort enumerated in the Squeezeout-Flip Over provision if in
connection therewith there are outstanding securities or there are
agreements or arrangements intended to counteract the protective
provisions of the Rights. For example, the Company may not merge
with an acquiring corporation if the acquiring corporation has
granted its shareholders rights to purchase its common stock at
less than fair market value upon the triggering of flip-over rights
in one of its acquisition targets. Any of the provisions of the
Rights Agreement may be amended by the Board of Directors of the
Company as long as the Rights are then redeemable. When the Rights
are not redeemable, the provisions of the Rights Agreement may be
amended by the Board only in order to cure any ambiguity, to
correct or supplement any provision which may be inconsistent with
any other provision or make changes which do not affect adversely
the interests of holders of Rights; PROVIDED, HOWEVER, that no
amendment may change the redemption price or the expiration date of
the Rights, and amendments after a person becomes an Acquiring
Person or an Adverse Person (other than pursuant to a Qualifying
Tender Offer) may be made only if approved by a majority of the
Continuing Directors.
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 dated March 7, 1995. A copy of the Rights
Agreement is available free of charge from the Rights Agent. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
Item 2. EXHIBITS.
4.1 Form of Common Stock Purchase Rights Agreement, dated as
of March 6, 1995, between the Company and American Stock
Transfer & Trust Company.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registra-
tion statement to be signed on its behalf by the undersigned,
thereto duly authorized.
March 7, 1995 WINDMERE CORPORATION
By:/s/ DAVID M. FRIEDSON
David M. Friedson, President
and Chief Executive Officer
WINDMERE CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
1995 COMMON STOCK PURCHASE RIGHTS AGREEMENT
Dated as of March 6, 1995
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . 5
Section 3. Issuance of Rights Certificates . . . . . . . . . . . . . 5
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . . . . . . . 8
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . . . . . . . . . . 9
Section 7. Exercise of Rights: Purchase Price: Expiration
Date of Rights. . . . . . . . . . . . . . . . . . . . . 10
Section 8. Cancellation and Destruction of Rights
Certificates. . . . . . . . . . . . . . . . . . . . . . . 12
Section 9. Reservation and Availability of Capital
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10. Common Stock Record Date. . . . . . . . . . . . . . . . . 14
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of
Rights; Exchange of Rights for
Shares of Common Stock. . . . . . . . . . . . . . . . . . 14
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. . . . . . . . . . . . . . . . . . . . . 24
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning
Power . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . 27
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . 28
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . 28
Section 17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . . . . . 29
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . 29
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. . . . . . . . . . . . . . . . . . . . . . . 30
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . 31
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . 33
Section 22. Issuance of New Rights Certificates.. . . . . . . . . . . 33
Section 23. Redemption and Termination. . . . . . . . . . . . . . . . 34
Section 24. Notice of Certain Events. . . . . . . . . . . . . . . . . 35
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 26. Supplements and Amendments. . . . . . . . . . . . . . . . 37
Section 27. Successors. . . . . . . . . . . . . . . . . . . . . . . . 37
Section 28. Determinations and Actions by the Board of
Directors, etc. . . . . . . . . . . . . . . . . . . . . . 38
Section 29. Benefits of this Agreement. . . . . . . . . . . . . . . . 38
Section 30. Severability. . . . . . . . . . . . . . . . . . . . . . . 38
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . 39
Section 32. Consent to Jurisdiction; Service of Process . . . . . . . 39
Section 33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 39
Section 34. Descriptive Headings. . . . . . . . . . . . . . . . . . . 39
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 6, 1995 (the "Agreement"),
between Windmere Corporation, a Florida corporation (the
"Company"), and American Stock Transfer & Trust Company (the
"Rights Agent").
W I T N E S S E T H:
WHEREAS, on February 3, 1995 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each share of
common stock, $.10 par value, of the Company (the "Common Stock")
outstanding at the close of business on March 1, 1995 (the "Record
Date") and has authorized the issuance of one Right (as such number
may hereinafter be adjusted pursuant to the provisions of Section
11(p) hereof) for each share of Common Stock issued between the
Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date. Each Right shall
initially represent the right to purchase one-quarter of one (.25)
share of Common Stock upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding. Notwithstanding the foregoing, the
term "Acquiring Person" shall not include (i) 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, or (ii) any Person who or which,
together with all Affiliates and Associates of such Person, would
be an Acquiring Person solely by reason of a reduction in the
number of issued and outstanding shares of Common Stock of the
Company pursuant to a transaction or a series of related
transactions approved by the Board of Directors (provided that at
the time of such approval of the Board of Directors there are then
in office not less than five Continuing Directors and such
transaction or series of related transactions are approved by a
majority of the Continuing Directors then in office); provided,
further, however, that in the event that such Person described in
the foregoing clause (ii) does not become an Acquiring Person by
reason of a reduction in the number of issued and outstanding
shares of Common Stock of the Company, such Person shall
nonetheless become an Acquiring Person in the event such Person
thereafter acquires Beneficial Ownership of an additional 1% of the
Common Stock of the Company, unless the acquisition of such
additional Common Stock would not result in such Person becoming an
Acquiring Person by reason of a reduction in the number of issued
and outstanding shares of Common Stock of the Company.
(b) (i) "Act" shall mean the Securities Act of 1933, as
amended.
(ii) "Adverse Person" shall mean any Person who
or which, together with all Affiliates and Associates shall
become the direct or indirect Beneficial Owner of 10% or more
of the shares of Common Stock and is deemed by a majority of
the Board of Directors of the Company to be a Person whose
ownership interest would cause a material adverse impact on
the business or prospects of the Company or its shareholders
(provided that at the time of such determination of the Board
of Directors there are then in office not less than five
Continuing Directors and such determination is approved by a
majority of the Continuing Directors then in office).
(c) "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").
(d) 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, warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or
(B) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made
with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of 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 public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not
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 Persons
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in proviso (A) to subparagraph (ii) of this
paragraph (d)) or disposing of any voting securities of the
Company; PROVIDED, HOWEVER, that nothing in this paragraph (d)
shall cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such
person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date
of such acquisition.
Notwithstanding anything in this Section 1(d) to the contrary,
a Person engaged in the business of underwriting securities shall
not be deemed a "Beneficial Owner" of, or to "beneficially own",
any securities acquired in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such
acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(f) "Close of business" on any given date shall mean
5:00 P.M., New York time, on such date; PROVIDED, HOWEVER, that if
such date if not a Business Day it shall mean 5:00 P.M., New York
time, on the next succeeding day which is a Business Day.
(g) "Common Stock" shall mean the common stock, $.10 par
value, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control
or direct the management, of such Person.
(h) "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a
member of the Board, who is not an Acquiring Person or an Affiliate
or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliates or Associate, and was a
member of the Board prior to the date of this Agreement, or (ii)
any Person who subsequently becomes a member of the Board, while
such Person is a member of the Board, who is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person or a
representative of an Acquiring Person or any such Affiliate or
Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the
Continuing Directors.
(i) "Current market price" shall have the meaning set
forth in Section 11(d) hereof.
(j) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
(k) "Exchange Act" shall have the meaning set forth in
Section 1(c) hereof.
(l) "Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(m) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(n) "Person" shall mean any individual, firm or
corporation, partnership or other entity.
(o) "Principal Party" shall have the meaning set forth
in Section 13(b) hereof.
(p) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(q) "Redemption Price" shall have the meaning set forth
in Section 23(a) hereof.
(r) "Rights" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(s) "Rights Certificates" shall have the meaning set
forth in Section 3(a) hereof.
(t) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(u) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(v) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition,
shall include, a report filed pursuant to the Exchange Act) by the
Company, an Acquiring Person or an Adverse Party that an Acquiring
Person and/or an Adverse Party has become such.
(w) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(x) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(y) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company
hereby appoints the Rights Agent to act as agent for the Company 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. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on
the tenth day after the Stock Acquisition Date (or, if the tenth
day after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of
business on the tenth business day (or such later date as may be
determined by action of the Board of Directors (but only if at the
time of such determination by the Board of Directors there are then
in office not less than five Continuing Directors and such action
is approved by a majority of the Continuing Directors then in
office) prior to such time as any Person becomes an Acquiring
Person or an Adverse Party) after the date that a tender or
exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant
to the terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof,
such Person would be an Acquiring Person or an Adverse Party (the
earlier of (i) or (ii) 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 the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only
in connection with the transfer of the underlying shares of Common
Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send
by first-class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in
substantially the form attached hereto as Exhibit A (the "Rights
Certificates"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at the time
of distribution of the Rights Certificates, the Company shall make
the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit B (the "Summary
of Rights"), by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records of
the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock
and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of
the Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of
which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date.
Certificates representing such shares of Common Stock issued after
the date hereof and prior to the earlier of the Distribution Date
or the Expiration Date shall also be deemed to be certificates for
Rights, and shall bear the following legend:
"This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in the Rights Agreement between Windmere
Corporation (the "Company") and American Stock
Transfer & Trust Company, as Rights Agent (the
"Rights Agent"), dated as of March 6, 1995
(the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference
and a copy of which is on file at the
principal offices of the 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
Rights Agent will mail to the holder of this
certificate a copy of the Rights Agreement, as
in effect on the date of mailing, without
charge promptly after the receipt of a written
request therefor. UNDER CERTAIN CIRCUMSTANCES
SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS
OR BECOMES AN ACQUIRING PERSON, AN ADVERSE
PARTY OR ANY AFFILIATE OR ASSOCIATE THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BECOME NULL AND VOID."
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 in substantially the form attached hereto as Exhibit
A 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 shares of Common Stock
as shall be set forth therein at the price set forth therein (such
exercise price per share being hereinafter referred to as the
"Purchase Price"), but the amount 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, an Adverse Person or any Associate or
Affiliate thereof, (ii) a transferee of an Acquiring Person or an
Adverse Person (or of any such Associate or Affiliate) who becomes
a transferee after the Acquiring Person or Adverse Person becomes
such or (iii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person or
the Adverse Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from
the Acquiring Person or the Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to any
Person with whom such Acquiring Person or Adverse 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, an Adverse Person or an Affiliate or
Associate thereof (as such terms are defined
in the Rights Agreement between Windmere
Corporation and American Stock Transfer &
Trust Company, as Rights Agent (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 the Rights
Agreement."
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President or any
Vice President, either manually or by facsimile signature, and
shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Rights
Certificates shall be manually or by facsimile signature
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall
cease to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company authorized to
sign such Rights Certificate, although at the date of the execution
of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books
shall show the name and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business
on the Expiration Date, any Rights Certificate or Certificates may
be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder
thereof to purchase a like number of shares of Common Stock as the
Rights Certificate or Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent and shall
surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled 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 reasonably
satisfactory to them, and reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a
new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
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
9(c) and Section 23(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of shares of Common
Stock as to which such surrendered Rights are then exercisable, at
or prior to the earlier of (i) the close of business on March 6,
2005 (the "Final Expiration Date") or (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier
of (i) and (ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $25, and
shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance
with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one (1) share of
Common Stock to be purchased, as set forth below and an amount
equal to any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Common Stock
(or make available, if the Rights Agent is the transfer agent for
such shares) certificates for the total number of shares of Common
Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests or (B) if the
Company shall have elected to deposit the total number of shares of
Common Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary
receipts representing such number of shares of Common Stock as are
to be purchased (in which case certificates for the shares of
Common Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will
direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid
in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate. The payment of
the Purchase Price shall be made in cash or by certified bank check
payable to the Company.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or names as may
be designated by such holder, subject to the provisions of Section
14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
Person, an Adverse Person or an Associate or Affiliate thereof,
(ii) a transferee of an Acquiring Person or an Adverse Person (or
of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person or Adverse Person becomes such or (iii) a
transferee of an Acquiring Person or an Adverse Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or the
Adverse Person to holders of equity interests in such Acquiring
Person or Adverse Person or to any Person with whom the Acquiring
Person or the Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section
7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure
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 other Person as a result of its failure to
make any determinations with respect to an Acquiring Person, an
Adverse Person or their respective Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES. All Rights Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to
the Rights Agent for cancellation or in 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 Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all 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 CAPITAL STOCK.
(a) The Company covenants and agrees that, from and
after the Distribution Date, it will cause to be reserved and kept
available out of its authorized and unissued shares of Common Stock
not reserved for another purpose the number of shares of Common
Stock that, as provided in this Agreement, will be sufficient to
permit the exercise in full of all outstanding Rights; provided,
however, that the Company shall not be required to reserve and keep
available shares of Common Stock or other securities sufficient to
permit the exercise in full of all outstanding Rights pursuant to
the adjustments set forth in Section 11(a)(ii) or Section 13 hereof
unless the Rights become exercisable pursuant to such adjustments.
(b) So long as the shares of Common Stock issuable and
deliverable upon the exercise of the 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 shall use its best efforts to (i) file,
as soon as is required by law following the Distribution Date, a
registration statement under the Act, with respect to the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus
at all time meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable
for such securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend,
for a period of time not to exceed ninety (90) days after the date
set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of
Common Stock delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of shares of Common Stock 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 a number of shares of Common Stock
in respect of a name other than that of, the registered holder of
the Rights Certificates evidencing Rights surrendered for exercise
or to issue or deliver any certificates for a number of shares of
Common Stock in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have been paid
(any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. COMMON STOCK RECORD DATE. Each person in whose
name any certificate for a number of shares of Common Stock (or
other securities, as the case may be) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the
holder of record of such shares of Common Stock represented thereby
on, and such certificates shall be dated, the date upon which the
Rights Certificate evidenced such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes)
was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Common Stock 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 Stock
transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceeding of the Company except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND
OF SHARES OR NUMBER OF RIGHTS; EXCHANGE OF RIGHTS FOR SHARES OF
COMMON STOCK. 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 Stock payable in shares of Common Stock, (B) subdivide
the outstanding Common Stock, (C) combine the outstanding
Common Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the
Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
and kind of shares of Common 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,
upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Common Stock which, if
such Right had been exercised immediately prior to such date
and at a time when the Common Stock transfer books of the
Company were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii) hereof.
(ii) In the event that any Person shall, at any
time after the Rights Dividend Declaration Date (as defined in
the WHEREAS clause at the beginning of this Agreement), become
an Acquiring Person or an Adverse Person, unless the event
causing such Person to become an Acquiring Person or an
Adverse Person is an acquisition of shares of Common Stock
pursuant to a cash tender offer for all outstanding shares of
Common Stock at a price and on terms determined by at least a
majority of the members of the Board of Directors who are not
officers of the Company (provided that at the time of such
determination of the Board of Directors there are then in
office not less than five Continuing Directors and such
determination is also made by a majority of the Continuing
Directors then in office), after receiving advice from one or
more investment banking firms, to be (a) at a price which is
fair to stockholders (taking into account all factors which
such members of the Board deem relevant including, without
limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best
interests of the Company and its stockholders (a "Qualifying
Tender Offer"), then, subject to the last sentence of Section
23(a) and except as otherwise provided in this Section 11,
each holder of a Right (except as provided in Section 7(e)
hereof) shall thereafter have the right to receive, upon
exercise thereof, the number of shares of Common Stock as
shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of shares of Common Stock
for which a Right was exercisable immediately prior to the
first occurrence of the Section 11(a)(ii) Event and (y)
dividing that product by 50% of the current market price (as
determined pursuant to Section 11(d) hereof) per share of the
Common Stock on the date of the occurrence of such Section
11(a)(ii) Event.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common
Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record
date) Common Stock (or shares having the same rights, privileges
and preference as the shares of Common Stock ("equivalent common
stock")) or securities convertible into Common Stock or equivalent
common stock at a price per share of Common Stock or per share of
equivalent common stock (or having a conversion price per share, if
a security convertible into Common Stock or equivalent common
stock) less than the current stock market price as determined
pursuant to Section 11(d) hereof) per share of Common Stock on such
record date, the Purchase Price to be in effect after such record
date, shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of shares of
Common Stock which the aggregate offering price of the total number
of shares of Common Stock and/or equivalent common stock so to be
offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current market price, and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date,
plus the number of additional shares of Common Stock and/or
equivalent common stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be
paid by delivery of consideration part or all of which may be in a
form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Common Stock owned by or held for
the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event
that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator
of which shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of Common Stock on such record
date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to a share of Common Stock and the denominator of which shall be
such current market price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock. 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 be
adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the
"current market price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share
of such Common Stock for the thirty (30) consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such
date; PROVIDED, HOWEVER, that in the event that the current market
price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution of such Common Stock payable in
shares of such Common Stock or securities convertible into shares
of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading
Day period after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the "current
market price" shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock 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 shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or such other system then in use, or, if on any
such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Common Stock selected by the Board of Directors of the Company. If
on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in
good faith by the Board 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 shares of Common Stock
are listed or admitted to trading is open for the transaction of
business or, if the shares or Common Stock are not listed or
admitted to trading on any national securities exchange, a Business
Day. If the Common Stock is not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value
per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes of this Agreement.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one-thousandth
of a share of Common Stock or other share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than
the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares or
fraction of a share of capital stock other than Common Stock,
thereafter the number or fraction of such other shares so
receivable upon exercise of any Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Sections
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Common Stock shall apply on like terms to any such other
shares.
(g) All rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of shares of Common Stock 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 Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that fraction of a share (or number of
shares) of Common Stock (calculated to the nearest one-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
lieu of any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the
nearest one-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least ten
(10) days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders
of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the fraction of a share (or number of shares) of
Common Stock 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 stated or par
value, if any, of the number of shares of Common Stock issuable
upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue such number of
fully paid and nonassessable shares of Common Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of shares of
Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of
shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in
their good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation
or subdivision of the Common Stock, (ii) issuance wholly for cash
of any shares of Common Stock at less than the current market
price, (iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common
Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof)
or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the Person
who constitute, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates
and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 26 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding shares
of Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each share of
Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction
the numerator which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
(q) In lieu of issuing shares of Common Stock in
accordance with Section 11(a)(ii) hereof, the Board of Directors
may, and, in the event that the number of shares of Common Stock
which are authorized by the Company's Amended and Restated Articles
of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient
to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof, the Board of Directors shall, to the
extent permitted by applicable law and any material agreements then
in effect to which the Company is a party, (A) determine the value
of the shares of Common Stock (the "Adjustment Shares") issuable
upon the exercise of a Right immediately after the adjustments
provided for in Section 11(a)(ii) (the "Current Value") and (B)
with respect to each Right (other than Rights which have become
void pursuant to the provisions hereof), make adequate provision to
substitute for any or all such Adjustment Shares, upon payment of
the applicable Purchase Price, (1) cash, (2) other equity
securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock which, by virtue of having
dividend, voting and liquidation rights substantially comparable to
those of the Common Stock, are deemed in good faith by the Board of
Directors to have substantially the same value as shares of Common
Stock (such shares or units of shares of preferred stock are herein
called "Common Stock equivalents")), (3) debt securities of the
Company, (4) other assets, (5) a reduction of the Purchase Price,
or (6) any combination of the foregoing having a value which, when
added to the value of the shares of Common Stock actually issued
upon exercise of such Right, shall have an aggregate value equal to
the Current Value, where such aggregate value equal to the Current
Value, where such aggregate value has been determined in good faith
by the Board of Directors based upon the advice of a nationally
recognized independent investment banking firm selected in good
faith by the Board of Directors; provided that if the Company shall
not have made adequate provision to deliver value pursuant to
clause (B) above within thirty days following the date (the
"Section 11(a)(ii) Trigger Date") which is the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company's right of redemption pursuant to Section 23(a)
expires, then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and cash have
an aggregate value equal to the excess of (x) the Current Value
over (y) the Purchase Price times the number of one-quarter of one
(.25) share of Common Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event. If, upon the occurrence of a Section 11(a)(ii) Event, the
number of shares of Common Stock that are authorized by the
Company's Restated Articles of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the
Rights are not sufficient to permit exercise in full of the Rights
in accordance with Section 11(a)(ii) hereof, and if the Board of
Directors shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, then, if the
Board of Directors so elects, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek stockholder approval for the
authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the "Substitution
Period"). To the extent that the Company determines that some
action must be taken pursuant to the first or second sentence of
this Section 11(q), the Company (x) shall provide, subject to
Section 11(a)(ii) hereof and the last sentence of this Section
11(q), 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 times as the
suspension is no longer in effect. For purposes of this Section
11(q), the value of the Common Stock shall be the Current market
price per share of the Common Stock on the Section 11(a)(ii)
Trigger Date and the per share or per unit value of any "Common
Stock equivalent" shall be deemed to equal the Current market price
per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate
the right to receive Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(q).
(r) (i) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring
Person or an Adverse Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for Common Stock at an exchange ratio of
1.56 shares of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Stock for or pursuant
to the terms of any such plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Common Stock then outstanding.
(ii) Immediately upon the action of the Board
of Directors of the Company ordering the exchange of any
Rights pursuant to paragraph (i) of this Section 11(r) and
without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such
exchange; PROVIDED, HOWEVER, that the failure to give, or any
defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof), held by
each holder of Rights.
(iii) In the event that there shall not be suf-
ficient Common Stock available for issuance to permit any
exchange of Rights as contemplated in accordance with this
Section 11(r), the Company shall take all such action as may
be necessary to authorize additional Common Stock for issuance
upon exchange of the Rights.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in
Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with the transfer agent for the
Common Stock, a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with Section 25
hereof.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof) shall consolidate with,
or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part
of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash
or any other property or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) in one transaction or a series of related
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 (other than the Company
or any Subsidiary of the Company in one or more transactions each
of which complies with Section 11(o) hereof), then, and in each
such case, proper provisions shall be made so that: (i) each holder
of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price (disregarding any adjustment of the
Purchase Price pursuant to Section 11(a)(ii) hereof) in accordance
with the terms of this Agreement, such number of validly authorized
and issued, fully paid, nonassessable and freely tradeable shares
of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the
number of shares of Common Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 1 l(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of shares
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and dividing
that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by (2) 50% of the current
market price (determined pursuant to Section 11(d)(i) hereof) per
share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of
a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of
the Rights; and (v) the provisions of Section 11(a)(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 shares
of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such
transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such
other Person; and (2) in case such Person is a Subsidiary, directly
or indirectly, of more than one Person, the Common Stocks of five
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 Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party
shall have a sufficient number of authorized shares of its Common
Stock which have not been issued or reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section
13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section
13, the Principal Party will
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and
each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights which have
not theretofore been exercised shall thereafter become exercisable
in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a cash tender offer for all
outstanding shares of Common stock which complies with the
provisions of Section 11(a)(ii) hereof (or a wholly owned
Subsidiary of any such Person or Persons), (ii) the price per share
of Common Stock offered in such transaction is not less than the
price per share of Common Stock paid to all holders of shares of
Common Stock whose shares were purchased pursuant to such tender
offer, and (iii) the form of consideration being offered to the
remaining holders of shares of Common stock pursuant to such
transaction is the same as the form of consideration paid pursuant
to such tender offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would be
otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right shall be
the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the 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 not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system
then in use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company.
If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock the Company
may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of a share
of Common Stock. For purposes of this Section 14(b), the current
market value of a share of Common Stock shall be the closing price
of a share of Common Stock (as determined pursuant to 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 fractional Rights
or any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any
registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), may, in his
own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of the Rights, the holders of the Rights would not have an
adequate remedy at law for any breach of this Agreement and shall
be entitled to specific performance of the obligations hereunder
and injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of
a Right by accepting of the same consents and agrees with the
Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose
name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or
the associated Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be affected
by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligations.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any purpose
the holder of the fraction of a share (or number of shares) of
Common Stock or any other securities of the Company which may at
any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except
as provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred
without negligence 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.
(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 Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; PROVIDED,
HOWEVER, that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 21 hereof.
In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement any of the Rights Certificates
shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have
been countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in the
name of the successor Rights Agent; and in all such cases such
Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its
prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations 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
acceptable to the Company (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person and the determination of "current
market price") be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the vice
Chairman of the Board, if any, the President, any Vice President,
the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence.
(d) 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 Section 11 or Section 13 hereof or responsible for
the manner, method or amount of any such adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any shares of Common Stock
to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Common Stock will, when so issued,
be validly authorized and issued, fully paid and nonassessable.
(e) 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.
(f) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the Vice Chairman
of the Board, if any, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any
such officer.
(g) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may
be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(h) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct; PROVIDED, HOWEVER, reasonable care was
exercised in the selection and continued employment thereof.
(i) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(j) 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 with the
Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon sixty (60) days' notice in writing
mailed to the Company, and to each transfer agent of the Common
Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon sixty (60)
days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to the transfer agent of the
Common Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of sixty (60) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Rights Certificate (who shall, with
such notice, submit his Rights Certificate for inspection by the
Company), then any registered holder of any Rights Certificate may
apply to any court of competent jurisdiction for the appointment of
a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of any
state of the United States, in good standing, 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 $5,000,000. 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 Stock and mail a notice thereof
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant
to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance
or sale; PROVIDED, HOWEVER, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no
such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date (or,
if the Stock Acquisition Date shall have occurred prior to the
Record Date, the close of business on the tenth day following the
Record Date) subject to extension by the Company pursuant to
Section 26 hereof, or (ii) the Final Expiration Date, redeem all
but not less than all the then outstanding Rights for cash at a
redemption price of $.00001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
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 five Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such
Continuing Directors: (i) such authorization occurs on or after the
time a Person becomes an Acquiring Person or an Adverse 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 an Adverse Person or
which would cause the occurrence of a Triggering Event; provided
further, however, that if, following the occurrence of a Stock
Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any Triggering Event, (i) a
Person who is an Acquiring Person or an Adverse Person shall have
transferred or otherwise disposed of a number of shares of Common
Stock 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 a Triggering Event such
that such Person is thereafter a Beneficial Owner of less than 10%
of the outstanding shares of Common Stock, and (ii) there are no
other Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons or Adverse
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 after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
Section 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of
any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Common Stock rights or
warrants to subscribe for or to purchase any additional shares of
Common Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common
Stock), or (iv) to effect any consolidation or merger into or with
any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect
any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50%
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), or (v) to effect
the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section
25 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Common Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Common Stock for purposes
of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the
shares of Common Stock whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each holder
of a Rights Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Common Stock shall be
deemed thereafter to refer, if appropriate, to other securities.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder
of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Windmere Corporation
5980 Miami Lakes Drive
Miami Lakes, Florida 33014
Attention: Chairman of the Board and
Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or
by the holder of any Rights Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, New York 11219
Attention: Vice President, Stock Transfer
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail, postage
pre-paid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. For as long as the
Rights are then redeemable and except as provided in the last
sentence of this Section 26, the Company may in its sole and
absolute discretion, 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 the Rights or the Common
Stock. At any time when the Rights are not then redeemable and
except as provided in the last sentence of this Section 26, the
Company may, 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 (a) to cure any ambiguity,
(b) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein
or (c) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable, provided,
that no such supplement or amendment pursuant to clause (c) above
shall materially adversely affect the interests of the holders of
Rights Certificates as such. 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 Rights
Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price or the Final Expiration Date and
supplements or amendments may be made after the time that any
Person becomes an Acquiring Person or an Adverse Person (other than
pursuant to a Qualifying Tender Offer) only if at the time of the
action of the Board of Directors approving such supplement or
amendment there are then in office not less than five Continuing
Directors and such supplement or amendment is approved by a
majority of the Continuing Directors then in office.
Section 27. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board of
Directors of the Company (with, where specifically provided for
herein, the concurrence of the Continuing Directors) shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board
(with, where specifically provided for herein, the concurrence of
the Continuing Directors) or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors)
in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other
parties and (y) not subject the Board or the Continuing Directors
to any liability to the holders of the Rights.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 30. SEVERABILITY. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors. Without limiting the
foregoing, if any provision requiring that a determination be made
by less than the entire Board (or at a time or with the concurrence
of a group of directors consisting of less than the entire Board)
is held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, such determination shall then be
made by the Board in accordance with applicable law and the Company
s Certificate of Incorporation and By-laws.
Section 31. GOVERNING LAW. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Florida and for all
purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts made and to be performed
entirely within such State.
Section 32. CONSENT TO JURISDICTION; SERVICE OF PROCESS.
The Company, the Rights Agent and the holders of the Rights
Certificates hereby irrevocably submit to the jurisdiction of the
state or federal courts located in Dade County, Florida in
connection with any suit, action or other proceeding arising out of
or relating to this Agreement and the transactions contemplated
hereby, and hereby agree not to assert, by way of motion, as a
defense, or otherwise in any such suit, action or proceeding that
the suit, action or proceeding is brought in an inconvenient forum,
that the venue of the suit, action or proceeding is improper or
that this Agreement or the subject matter hereof may not be
enforced by such courts.
Section 33. COUNTERPARTS. This Agreement may be executed
in counterparts and both of such counterparts shall for all
purposes be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the date
first above written.
Attest: WINDMERE CORPORATION
By: By:
Name: Burton Honig Name: David M. Friedson
Title: Vice President-Finance Title: President
Attest: AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: By:
Name: Name:
Title: Title:
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER MARCH 6, 2005 OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.00001 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 THE 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, AN ADVERSE PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON OR AN ADVERSE
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]<F1>1
<F1>
1 The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding
sentence.
RIGHTS CERTIFICATE
WINDMERE 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 March 6, 1995 (the "Rights Agreement"), between
Windmere Corporation, a Florida corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York corporation
(the "Rights Agent"), to purchase from the Company at any time
prior to 5:00 P.M. (New York time) on March 6, 2005 at the office
or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one-quarter of one (.25) fully paid,
non-assessable share of common stock, par value $.10 per share (the
"Common Stock"), of the Company, at a purchase price of $25.00 per
share (the "Purchase Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The Purchase Price shall be
paid in cash. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share
set forth above, are the number and Purchase Price as of March 6,
1995, based on the Common Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an
Acquiring Person, an Adverse Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), (ii)
a transferee of any such Acquiring Person, Adverse Person,
Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, an Adverse Person
or an Affiliate or Associate thereof, such Rights shall become null
and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Common Stock or other capital
stock or other securities, which may be purchased upon the exercise
of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the
Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of
the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced
by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company
at its option at a redemption price of $.00001 per Right at any
time prior to the earlier of the close of business on (i) the tenth
day following the Stock Acquisition Date (as such time period may
be extended pursuant to the Rights Agreement) and (ii) the Final
Expiration Date. Under certain circumstances set forth in the
Rights Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors. After the
expiration of the redemption period, the Company's right of
redemption may be reinstated if an Acquiring Person or an Adverse
Person reduces his beneficial ownership to less than 10% of the
outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company.
No fractional shares of Common Stock will be issued upon
the exercise of any Right or Rights evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of shares of Common Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed
to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of , 19
ATTEST: WINDMERE CORPORATION
By:
Secretary Title:
Countersigned:
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By:
Authorized Signature
[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 will all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the
within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 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 and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person, an Adverse Person or an Affiliate or
Associate thereof.
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.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: Windmere Corporation
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase
the shares of Common Stock issuable upon the exercise of the Rights
(or such other securities of the Company or of any other person
which may be issuable upon the exercise of the Rights) and requests
that certificates for such shares be issued in the name of and
delivered to:
Please insert social security or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the
balance of such Rights shall be registered in the name of and
delivered to:
Please insert social security or other identifying number
(Please print name and address)
Dated: , 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, an Adverse Person or an Affiliate or
Associate thereof (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or became an
Acquiring Person, an Adverse Person or an Affiliate or Associate
thereof.
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 STOCK
[WINDMERE CORPORATION LETTERHEAD]
March 6, 1995
To Our Shareholders:
Your Board of Directors today declared a dividend distribution
of one Right (a "Right") for each outstanding share of common
stock, $.10 par value (the "Common Stock"), of the Company to
shareholders of record at the close of business on March 1, 1995.
Each Right entitles the registered holder to purchase from the
Company one-quarter of one (.25) share of Common Stock at a price
of $25.00 per share (the "Purchase Price"), subject to adjustment.
This letter describes the Board's reasons for adopting the Common
Stock Purchase Rights Plan and summarizes the material terms of the
Rights Plan. The Rights Plan was not adopted in response to any
specific effort to acquire control of the Company, and the Board is
not aware of any such effort.
The Rights Plan contains provisions designed to protect share-
holders in the event of an unsolicited attempt to acquire the
Company, including a gradual accumulation of shares in the open
market, a partial or two-tier tender offer that does not treat all
shareholders equally, a squeeze-out merger and other abusive
takeover tactics that could impair the Board's ability to represent
your interests fully. The main purpose and value of a rights plan
is to potentially slow down the process by which a takeover of the
Company may occur in order to allow the Company's Board of
Directors and shareholders to have a sufficient amount of time to
research and evaluate whether or not a takeover is in the Company's
best interest. In terms of mechanics, rights plans deter certain
abusive takeover tactics by (i) making them unacceptably expensive
to the prospective acquiror, and (ii) by simultaneously encouraging
the prospective acquiror to negotiate with the board of directors
of the target.
The Rights Plan is definitely not intended to prevent an
acquisition of the Company on terms that are favorable and fair to
all shareholders. Further, it should not dissuade any prospective
offeror willing to negotiate with your Board of Directors and
certainly will not interfere with a merger or any other business
combination transaction that your Board of Directors deems to be
fair and provide full value to the shareholders. Further, the
Rights Plan is not intended to perpetuate the existence of current
management of the Company. The Rights Plan, however, is designed
to deal with the very serious problem of unilateral actions by
hostile acquirors that are calculated to deprive the Company's
Board and its shareholders of their ability to determine the
destiny of the Company.
Over 1,640 companies, including over one-half of the companies
in the Business Week 1000 and the Fortune 500 have issued rights to
protect their shareholders against these tactics.
According to a study conducted by Georgeson & Company, Inc.,
a respected proxy solicitation and shareholder relations
organization, companies protected by shareholders rights plans
received significantly higher premiums on their shares in takeover
contests than companies that had not adopted such a plan, after
adjustment for changes in the S&P 500 Index. The study also
concluded that such plans do not prevent takeovers and they also do
not diminish the value of a company's stock. There can be no
assurance, however, that the Plan will result in any premium being
paid on the Company's Common Stock in the event of a takeover
contest.
The issuance of the Rights does not in any way weaken the
financial strength of the Company or interfere with its business
plans. The issuance of the Rights has no dilutive effect, will not
affect reported earnings per share, is not taxable to the Company
or to you, and will not change the way in which you can presently
trade the Company's shares. As explained in detail below, the
Rights will only be exercisable if and when the problem arises
which they were created to deal with.
Your Board was aware when it acted that some people have
advanced arguments that securities of the sort we are issuing deter
legitimate acquisition proposals. We carefully considered these
views and concluded that the arguments are speculative and do not
justify leaving shareholders without any protection against unfair
treatment by an acquiror.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate
from the Common Stock and a distribution of the Rights will occur
upon the earlier of (i) ten business days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding
shares of Common Stock, (ii) ten business days after a person or
group of affiliated or associated persons has (x) become the direct
or indirect beneficial owner of at least 10% of the Company's
outstanding Common Stock, and (y) whose ownership interest is
deemed by the Board of Directors of the Company to cause a material
adverse impact on the business or prospects of the Company or its
shareholders (such persons or group hereinafter called an "Adverse
Person"), or (iii) ten business days following the commencement of
a tender offer or exchange offer that would result in a person or
group becoming an Acquiring Persons or an Adverse Person. Until
the date that the Rights are distributed (the "Distribution Date"),
(i) the Rights will be evidenced by the Common Stock certificates
and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the
date that the Rights Plan is adopted, will contain a notation
incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock
outstanding also will constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and
will expire ten years after the adoption of the Rights Plan, unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
If, following a person becoming an Acquiring Person or an
Adverse Person, (i) the Company shall consolidate with or merge
into any other person in which the Company is not the surviving
corporation, (ii) any other person shall merge into the Company and
all or part of the outstanding Common Stock shall be changed into
or exchanged for securities of any other person or cash or any
other property, or (iii) the Company sells 50% or more of its
assets or earning power, each Right then outstanding would "flip
over" and thereby would become a right to buy that number of shares
of Common Stock of the acquiring company which at the time of such
transaction has a market value of two times the exercise price of
the Right. Thus, if the acquiring company's Common Stock at the
time of such transaction were trading at $8 per share and the
exercise price of the Rights at such time was $6.25 per .25 shares,
each Right would thereafter be exercisable at $6.25 for 1.56 shares
(i.e., the number of shares that could be purchased for $12.50, or
two times the exercise price of the Right) of the acquiring
company's common stock.
In the event a person becomes an Acquiring Person or an
Adverse Person (except pursuant to an offer for all outstanding
shares of Common Stock that is determined by the Board of Directors
to be fair to and otherwise in the best interest of the Company and
its Shareholders, a "Qualifying Tender Offer"), each Right then
outstanding would "flip in" and become a right to buy that number
of shares of Common Stock of the Company which at the time of such
acquisition would have a market value of two times the exercise
price of the Right. The acquiror who triggered the Rights would be
excluded from the "flip-in" because his Rights would have become
null and void upon his triggering acquisition. Thus, if the
Company's Common Stock at the time of the "flip-in" were trading at
$8 per share and the exercise price of the Rights at such time were
$6.25 per .25 shares, each Right would thereafter be exercisable at
$6.25 for 1.56 shares of the Company's Common Stock.
In the event that the "flip in" is triggered, if there is not
sufficient authorized Common Stock available for issuance upon the
exercise of each Right or if the Board so elects, the Board may:
(i) seek shareholder approval to increase the number of authorized
shares of Common Stock or (ii) designate as issuable upon exercise
of the Rights such amount of Common Stock, cash, other equity or
debt securities, assets and/or other consideration as would be
equal to the value that would have been received if each Right had
received only Common Stock upon exercise.
At any time after a person becomes an Acquiring Person or an
Adverse Person and before the acquisition by a person or group of
50% or more of the outstanding Common Stock of the Company, the
board may exchange the Rights (other than Rights owned by such
person or group which have become void), in whole or in part, for
Common Stock at an exchange ratio of 1.56 shares of the Company's
Common Stock per Right, subject to adjustment.
At any time until ten days following the public announcement
that a person had become an Acquiring Person or an Adverse Person,
the Company may redeem the Rights in whole, but not in part, at a
price of $.00001 per Right, payable in cash or shares of Common
Stock. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of
a majority of the Continuing Directors (as hereinafter defined).
After the redemption period has expired, the Company's rights of
redemption may be reinstated if the Acquiring Person or Adverse
Person reduces his or her beneficial ownership to less than 10% of
the outstanding shares of Common Stock in a transaction or series
of transactions not involving the Company. Immediately upon the
action of the Board of Directors ordering redemption of the Rights,
with, where required, the concurrence of the Continuing Directors,
the Rights will terminate and the only right which the holders of
Rights will thereafter have will be to receive the $.00001
redemption price.
The term "Continuing Directors" means any member of the Board
of Directors of the Company who was a member of the Board prior to
the date of the Rights Agreement, and any person who is
subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person or an Adverse Person, or an affiliate
or associate of an Acquiring Person or an Adverse Person, or any
representative or designee of the foregoing.
The Purchase Price payable, and the number of shares of Common
Stock 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 Stock, (ii) if holders of the
Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the current
market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional shares of Common Stock will
be issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Common Stock on the last trading
date prior to the date of exercise.
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.
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 dated March 6, 1995. A copy of the Rights
Agreement is available free of charge from the Rights Agent. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
In declaring the Rights dividend, we have expressed our
confidence in the future and our determination that you, our
shareholders, be given every opportunity to participate fully in
that future.
On behalf of the Board of Directors.
David M. Friedson
