AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON AUGUST 28, 1998
Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
___________________
CROMPTON & KNOWLES CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
(State or Other Jurisdiction of Incorporation or Organization)
04-1218720
(I.R.S. Employer Identification No.)
One Station Place, Metro Center
Stamford, Connecticut 06902
(Address of Registrant's (Zip Code)
Principal Executive Offices)
Crompton & Knowles Corporation Employee Stock Ownership Plan
(Full Title of the Plan)
JOHN T. FERGUSON II
Vice President, General Counsel and Secretary
Crompton & Knowles Corporation
One Station Place, Metro Center
Stamford, Connecticut 06902
(Name and Address of Agent For Service)
(203) 353-5400
(Telephone Number, Including Area Code, of Agent for Service)
_____________________________
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Proposed Amount of
Securities to be Maximum Maximum Filing Fee
to be Registered Offering Aggregate
Registered Price Per Price
Share *
Common Stock 1,500,000 $18.0625 $27,093,750.00 $9,342.67
* Estimated for purposes of calculation of the registration
fee pursuant to Rule 457(h) and Rule 457(c) and based upon an
average of the high and low prices that the Common Stock of
Crompton & Knowles Corporation was sold for on the New York Stock
Exchange on August 24, 1998.
In addition, pursuant to Rule 416(c) under the Securities Act
of 1933, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee
benefit plan described herein.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I
will be sent or given to employees as specified by Rule 428(b)(1).
In accordance with the instructions to Part I of Form S-8, such
documents are not being filed and will not be filed with the
Securities and Exchange Commission (the "Commission"), either as
part of this registration statement or as a prospectus or
prospectus supplement pursuant to Rule 424. These documents and
those incorporated by reference pursuant to Item 3 of this
Registration Statement, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act
of 1933 (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are incorporated herein by reference the following
documents of Crompton & Knowles Corporation (the "Corporation") and
the Crompton & Knowles Corporation Employee Stock Ownership Plan
(the "Plan") filed with the Securities and Exchange Commission (the
"Commission"):
(1) Annual Report of the Corporation on Form 10-K for the
fiscal year ended December 27, 1997;
(2) Quarterly Reports of the Corporation on Form 10-Q for
the quarters ended March 28, 1998 and June 27, 1998;
(3) the description of the Corporation's Common Stock
contained in the Corporation's Registration Statement
on Form 8-A, dated July 19, 1988;
(4) the description of the Corporation's Preferred Share
Purchase Rights (which are currently transferred with
the Corporation's Common Stock) contained in the
Corporation's Registration Statement on Form 8-A,
dated July 19, 1988; and
(5) Annual Report of the Plan on Form 11-K for the year
ended December 31, 1997.
All documents filed by the Corporation or the Plan pursuant to
Section 13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent
to the date of this Registration Statement prior to the filing of
a Post-Effective Amendment to this Registration Statement which
indicates that all securities offered hereby have been sold or
which deregisters those securities remaining unsold shall be deemed
to be incorporated by reference into this Registration Statement
and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 67 of the Business Corporation Law of the Commonwealth
of Massachusetts (the "B.C.L.") sets forth conditions and
limitations governing the indemnification of officers, directors,
and other persons of the Corporation.
The Corporation's By-laws provide that the Corporation shall,
to the full extent permitted by law, indemnify each of its
directors and officers (including persons who serve at its request
as directors, officers, or trustees of another organization in
which it has any interest, direct or indirect, as a shareholder,
creditor, or otherwise or who serve at its request in any capacity
with respect to any employee benefit plan) against all liabilities
and expenses, including amounts paid in satisfaction of judgments,
in compromise, or as fines and penalties, and counsel fees,
reasonably incurred by him in connection with the defense or
disposition of any action, suit, or other proceeding, whether civil
or criminal, in which he may be involved or with which he may be
threatened, while in office or thereafter, by reason of his being
or having been such a director, officer, or trustee, except with
respect to any matter as to which he shall have been adjudicated in
any proceeding not to have acted in good faith in the reasonable
belief that his action was in the best interests of the Corporation
or, to the extent that such matter related to the service with
respect to an employee benefit plan, in the best interest of the
participants or beneficiaries of such employee benefit plan;
provided, however, that as to any matter disposed of by a
compromise payment by such director or officer, pursuant to a
consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless such
compromise shall be approved as in the best interests of the
Corporation, after notice that it involves such indemnification:
(a) by a disinterested majority of the directors then in office; or
(b) by a majority of the disinterested directors then in office,
provided that there has been obtained an opinion in writing of
independent legal counsel to the effect that such director or
officer appears to have acted in good faith in the reasonable
belief that his action was in the best interests of the
Corporation; or (c) by the holders of a majority of the outstanding
stock at the time entitled to vote for directors, voting as a
single class, exclusive of any stock owned by any interested
director or officer.
Expenses, including counsel fees, reasonably incurred by any
director or officer in connection with the defense or disposition
of any such action, suit, or other proceeding may be paid from time
to time by the Corporation, at the discretion of a majority of the
disinterested directors then in office, in advance of the final
disposition thereof upon receipt of an undertaking by such director
or officer to repay the amount so paid to the Corporation if it is
ultimately determined that indemnification for such expenses is not
authorized pursuant to the By-laws, which undertaking may be
accepted without reference to the financial ability of such
director or officer to make repayment.
The Corporation's Amended and Restated Articles of
Organization provide that a director shall not be personally liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director; provided, however, that
this shall not eliminate or limit the liability of a director to
the extent provided by applicable law (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 61 or 62 of the B.C.L. (such sections relate generally to
the liability of directors for authorizing distributions to
shareholders at a time when the Corporation is insolvent or
bankrupt and the liability of directors for approving loans to
officers or directors of the Corporation which are not repaid and
which were not approved or ratified by a majority of disinterested
directors or shareholders), or (iv) for any transactions from which
the director derived an improper personal benefit. No amendment to
or repeal of this provision shall apply to or have any effect on
the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Corporation has submitted the Plan to the Internal Revenue
Service (the "IRS"), and the IRS has determined that the plan is
qualified. Certain amendments to the Plan have since been adopted.
In reliance on certain IRS regulations regarding the "extended
remedial amendment period" for filing plan amendments with the IRS,
however, these amendments have not yet been submitted to the IRS.
The Corporation undertakes to submit all amendments made to the
Plan as of the date of this Registration Statement and all future
amendments to the Plan to the IRS in a timely manner and to make
all changes required by the IRS in order to assure the Plan
continues to qualify.
4.1 Restated Articles of Organization of the Corporation filed
with the Commonwealth of Massachusetts on October 27,
1988, as amended on April 10, 1990, and on April 14, 1992,
filed as Exhibit 3(a) to the Corporation's Annual Report
on Form 10-K for the fiscal year ended December 26,
1992 (Commission File No. 1-4663) and incorporated
herein by reference.
4.2 By-laws of the Corporation as amended to date,
filed as Exhibit 3(i) to the Corporation's Annual
Report on Form 10-K for the fiscal year ended December
27, 1997 (Commission File No. 1-4663) and incorporated
herein by reference.
4.3 Rights Agreement dated as of July 20, 1988, between
the Registrant and Mellon Bank, N.A., as Rights Agent,
as amended on March 28, 1991, October 1, 1992, and
January 20, 1998, and restated to incorporate all
amendments.
23 Consent of independent auditors KPMG Peat Marwick LLP.
24 Power of attorney.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to
this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the
most recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement. Notwithstanding the foregoing, any
increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not exceed
that which was registered) and any deviation
from the low or high and of the estimated
maximum offering range may be reflected in the
form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no
more than 20 percent change in the maximum
aggregate offering price set forth in
the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (and, where applicable,
each filing of any employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934, as
amended), that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) That, insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
SIGNATURES
The Registrant. Pursuant to the requirements of the
Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto
duly authorized.
CROMPTON & KNOWLES CORPORATION
(Registrant)
Date: August 28, 1998 By: /s/Charles J. Marsden
Charles J. Marsden
Senior Vice President and
Director
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the following
persons on behalf of the Registrant and in the capacities and on
the date indicated.
NAME TITLE
Vincent A. Calarco* Chairman, President and Chief
Executive Officer
(Principal Executive Officer)
Charles J. Marsden* Senior Vice President,
Chief Financial Officer,
and Director
(Principal Financial Officer)
Peter Barna* Vice President, Finance
(Principal Accounting Officer)
James A. Bitoni* Director
Robert A. Fox* Director
Roger L. Headrick* Director
Leo I. Higdon, Jr.* Director
C.A. Piccolo* Director
Patricia K. Woolf* Director
Date: August 28, 1998 *By /s/John T. Ferguson II
John T. Ferguson II
Attorney-in-Fact
The Plan. Pursuant to the requirements of the Securities
Act of 1933, the Plan Administrator of the Plan has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Stamford,
State of Connecticut, on the 28th day of August, 1998.
CROMPTON & KNOWLES CORPORATION
(as Plan Administrator)
Date: August 28, 1998 By: /s/Charles J. Marsden
Charles J. Marsden
Senior Vice President,
Chief Financial Officer,
and Director
EXHIBIT INDEX
Exhibits required by S-K item 601:
Exhibit
Number Exhibit Description
4.1 Restated Articles of Organization of the Registrant filed
with the Commonwealth of Massachusetts on October 27,
1988, as amended on April 10, 1990 and on April 14, 1992,
filed as Exhibit 3(a) to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 26,
1992 (Commission File No. 1-4663) and incorporated
herein by reference.
4.2 By-laws of the Registrant as amended to date, filed as
Exhibit 3(i) to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 27, 1997
(Commission File No. 1-4663) and incorporated herein by
reference.
4.3 Rights Agreement dated as of July 20, 1988, between
the Registrant and Mellon Bank, N.A., as Rights Agent,
as amended on March 28, 1991, October 1, 1992, and
January 20, 1998, and restated herein to
incorporate all amendments.
23 Consent of KPMG Peat Marwick LLP.
24 Power of attorney.
EXHIBIT 4.3
CROMPTON & KNOWLES CORPORATION
and
MELLON BANK, N.A.
Rights Agent
Rights Agreement
Dated as of July 20, 1988, as amended
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Right Certificates 6
Section 4. Form of Right Certificates 9
Section 5. Countersignature and Registration 9
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right
Certificates 10
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 12
Section 8. Cancellation and Destruction of Right
Certificates 14
Section 9. Availability of Preferred Shares 14
Section 10. Preferred Shares Record Date 15
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights 16
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares 27
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 27
Section 14. Fractional Rights and Fractional Shares 29
Section 15. Rights of Action 31
Section 16. Agreement of Right Holders 32
Section 17. Right Certificate Holder Not Deemed a
Shareholder 32
Section 18. Concerning the Rights Agent 33
Section 19. Merger or Consolidation or Change of Name
of Rights Agent 34
Section 20. Duties of Rights Agent 35
Section 21. Change of Rights Agent 38
Section 22. Issuance of New Right Certificates 39
Section 23. Redemption 40
Section 24. Exchange 41
Section 25. Notice of Certain Events 43
Section 26. Notices 44
Section 27. Supplements and Amendments 45
Section 28. Successors 46
Section 29. Benefits of this Agreement 46
Section 30. Severability 46
Section 31. Governing Law 47
Section 32. Counterparts 47
Section 33. Descriptive Headings 47
Exhibit A- Form of Certificate of Vote of Directors
Establishing Series A Junior Participating
Preferred Stock
Exhibit B- Form of Right Certificate
Exhibit C- Summary of Rights to Purchase Preferred Shares
RIGHTS AGREEMENT
Agreement, dated as of July 20, 1988, as amended, between
Crompton & Knowles Corporation, a Massachusetts corporation (the
"Company"), and Mellon Bank, N.A., a national banking association
(the "Rights Agent").
The Board of Directors of the Company has authorized and declared
a dividend of one preferred share purchase right (a "Right") for
each Common Share (as hereinafter defined) of the Company
outstanding on August 5, 1988 (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined), upon the terms and
subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 20% or more of the Common Shares of the
Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 20% or more
of the Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of
20% or more of the Common Shares of the Company then outstanding
by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person". Notwithstanding the
foregoing, if the Board of Directors of the Company determines in
good faith that a Person who would otherwise be an Acquiring
Person, as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an Acquiring
Person, as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an
"Acquired Person" for any purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report); or
which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso
to Section 1(c)(ii)(B)) or disposing of any securities of the
company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the term "outstanding", when used with
reference to a Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed
to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, a
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.
"Close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
"Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $1.00 per share, of
the Company. "Common Shares" when used with reference to any
Person other than the Company shall mean the capital stock (or
equity interest) with the greatest voting power of such other
Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such
first-mentioned Person.
"Distribution Date" shall have the meaning set forth in Section 3
hereof.
"Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
"Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise)
of such entity.
"Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, without par value, of the Company
having the rights and preferences set forth in the Form of
Certificate of Vote of Directors attached to this Agreement as
Exhibit A.
"Redemption Date" shall have the meaning set forth in Section 7
hereof.
"Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
"Subsidiary" of any Person shall mean any corporation or other
entity a majority of the voting power of the voting equity
securities or equity interest of which is owned, directly or
indirectly, by such Person.
Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior
to the Distribution Date also be the holders of the Common
Shares) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such co-Rights Agents as it may
deem necessary or desirable.
Issue of Right Certificates. (a) Until the earlier of (i) the
tenth day after the Shares Acquisition Date or (ii) the tenth
business day (or such later date as may be determined by action
of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement
by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for
or pursuant to the terms of any such plan) of, or of the first
public announcement of the intention of 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
entity holding Common Shares for or pursuant to the terms of any
such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating 20% or more of the
then outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare
and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase
Preferred Shares, in substantially the form of Exhibit C hereto
(the "Summary of Rights"), by first-class, postage-prepaid mail,
to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto.
Until the Distribution Date (or the earlier of the Redemption
Date or the Final Expiration Date), the surrender for transfer of
any certificate for Common Shares outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby.
Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred
to in the last sentence of this paragraph (c)) after the Record
Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed
on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between
Crompton & Knowles Corporation and Mellon Bank, N.A., dated as of
July 20, 1988, as amended (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of Crompton &
Knowles Corporation. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. Crompton & Knowles Corporation will mail to the
holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. As described
in the Rights Agreement, Rights issued to any Person who becomes
an Acquiring Person (as defined in the Rights Agreement) shall
become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or
acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares
shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common
Shares which are no longer outstanding.
Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment
to be printed on the reverse thereof) shall be substantially the
same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject
to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein
at the price per one one-hundredth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such one one-
hundredths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.
Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by its Chairman, its
President or any of its Vice Presidents, either manually or by
facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested by the Clerk
or an Assistant Clerk of the Company, either manually or by
facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent, either manually or by
facsimile signature, and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force
and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose,
books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number
of Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. Subject to the provisions of Section 14 hereof, at
any time after the close of business on the Distribution Date,
and at or prior to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section
24 hereof) may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling
the registered holder to purchase a like number of one one-
hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make
such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal
office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange
of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction
or mutilation of a Right Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory
to them, and, at the Company's request, reimbursement to the
Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company
will make and deliver a new Right Certificate of like tenor to
the Rights Agent for delivery to the registered holder in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution
Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-
hundredth of a Preferred Share as to which the Rights are
exercised, at or prior to the earliest of (i) the close of
business on August 4, 2008 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which
such Rights are exchanged as provided in Section 24 hereof.
The Purchase Price for each one one-hundredth of a Preferred
Share pursuant to the exercise of a Right shall initially be
$800, shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with
paragraph (c) below.
Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Shares certificates for the
number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary
agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section
14 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 Right Certificate, registered in
such name or names as may be designated by such holder and (iv)
when appropriate, after receipt, deliver such cash to or upon the
order of the registered holder of such Right Certificate.
In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its treasury,
the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with
this Section 7.
Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent
for cancellation or in cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such
cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Availability of Preferred Shares. The Company covenants and
agrees that it will take all such action as may be necessary to
ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and
nonassessable shares.
The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Preferred Shares
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares in a name other than
that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred
Shares upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such
tax is due.
Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares represented thereby on, and
such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes)
was made; provided, however, that if the date of such surrender
and payment is a date upon which the Preferred Shares transfer
books of the Company are closed, such person shall be deemed to
have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on
which the Preferred Shares transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred 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.
(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares
into a smaller number of Preferred Shares or (D) issue any shares
of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Preferred Shares transfer books of the Company
were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the
number of one-hundredths of a Preferred Share for which a Right
is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common
Shares of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one-
hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall
become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the
Rights.
From and after the occurrence of such event, any Rights that are
or were acquired or beneficially owned by any Acquiring Person
(or any Associate or Affiliate of such Acquiring Person) shall be
void and any holder of such Rights shall thereafter have no right
to exercise such Rights under any provision of this Agreement.
No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall take all such
action as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights. In the event the
Company shall, after good faith effort, be unable to take all
such action as may be necessary to authorize such additional
Common Shares, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exercise of a Right,
a number of Preferred Shares or fraction thereof such that the
current per share market price of one Preferred Share multiplied
by such number or fraction is equal to the current per share
market price of one Common Share as of the date of issuance of
such Preferred Shares or fraction thereof.
In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred
Shares (or shares having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per
share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the then current per share
market price of the Preferred Shares (as defined in Section
11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number
of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights,
options or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including
any such distribution made in conjunction with a consolidation or
merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the then current per share market price of the Preferred Shares
on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share and the denominator
of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of
the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to
be the average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market
price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security
or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is 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 Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ")
or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the
Board of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for
the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a
Business Day.
For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined
in accordance with the method set forth in Section 11(d)(i). If
the Preferred Shares are not publicly traded, the "current per
share market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by one
hundred. If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded "current per share
market price" shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent.
No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1%
in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from
the date of the transaction which requires such adjustment or
(ii) the date of the expiration of the right to exercise any
Rights.
If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company
other than Preferred Shares, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect
to the Preferred Shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10 and 13 with
respect to the Preferred Shares shall apply on like terms to any
such other shares.
All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number
of one one-hundredths of a Preferred Share purchasable from time
to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of one one-hundredths of
a Preferred Share (calculated to the nearest one one-millionth of
a Preferred Share) obtained by (i) multiplying (x) the number of
one one-hundredths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-
hundredths of a Preferred Share purchasable upon the exercise of
a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so
to be distributed shall be issued, executed and countersigned in
the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the
record date specified in the public announcement.
Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable
upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the
Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value,
if any, of the Preferred Shares issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until
the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the Preferred Shares
and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares
and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event requiring
such adjustment.
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 it in its sole
discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current
market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or
exchangeable for Preferred Shares, dividends on Preferred Shares
payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made
by the Company to holders of its Preferred Shares shall not be
taxable to such shareholders.
In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare
or pay any dividend on the Common Shares payable in Common Shares
or (ii) effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment
of dividends in Common Shares) into a greater or lesser number of
Common Shares, then in any such case (i) the number of one one-
hundredths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event,
and (ii) each Common Share outstanding immediately after such
event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such
event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever
such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate
setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) file with the Rights Agent
and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof.
Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event, directly or indirectly, (a) the Company
shall consolidate with, or merge with and into, any other Person,
(b) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or
the Company) or cash or any other property, or (c) the Company
shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or
one or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder
of a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the number
of one one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares of
such other Person (including the Company as successor thereto or
as the surviving corporation) as shall equal the result obtained
by (A) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right is
then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date
of consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger,
sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the Common Shares thereafter deliverable
upon the exercise of the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental
agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions
of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the 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.
The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights
or to distribute certificates which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred
Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of
one one-hundredth of a Preferred Share, the Company shall pay to
the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one Preferred
Share. For the purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided
above).
Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer; and
the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Right Certificate Holder Not Deemed a Shareholder. No holder, as
such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the
Preferred Shares or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have
been exercised in accordance with the provisions hereof.
Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights
Agent, for and to hold it harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability in
the premises.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20
hereof.
Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which
the Rights Agent or any successor Rights Agent shall be a party,
or any corporation succeeding to the stock transfer or corporate
trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, that such
corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so
counter-signed; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in
the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
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 Right Certificates, by their acceptance thereof, shall be
bound:
The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman,
the President, any Vice President, the Treasurer or the Clerk 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.
The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or
willful misconduct.
The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or
in the Right Certificates (except its countersignature thereof)
or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company
only.
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 Right 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 Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the
terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that
such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as
to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
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.
The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any one of the Chairman, the President, any Vice
President, the Clerk 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 by it in good faith in accordance with instructions
of any such officer or for any delay in acting while waiting for
those instructions.
The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company
and to each transfer agent of the Common Shares or Preferred
Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the
Common Shares or Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after waiving notice
of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by
the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the
United States or of the State of New York (or of any other state
of the United States so long as such corporation is authorized to
do business as a banking institution in the State of New York),
in good standing, having an office in the State of New York,
which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall
file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares,
and mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its 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 Right Certificates
made in accordance with the provisions of this Agreement.
Redemption.(a) The Board of Directors of the Company may, at its
option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors
may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish.
Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to
subsection (a) of this Section 23, and without any further action
and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; provided,
however, that the failure to give or any defect in any such
notice shall not affect the validity of such redemption. Without
10 days after such action of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23
or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Exchange. (a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring 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 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after
any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant
to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
Immediately upon the action of the Board at Directors of the
Company ordering the exchange of any Rights pursuant to paragraph
(a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and
the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares 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 Shares for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by
each holder of Rights.
In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance upon
exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares, the Company
shall substitute, for each Common Share that would otherwise be
issuable upon exchange of a Right, a number of Preferred Shares
or fraction thereof such that the current per share market price
of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one Common Share
as of the date of issuance of such Preferred Shares of fraction
thereof.
The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common Shares, the
Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Common Share.
For the purposes of this paragraph (e), the current market value
of a whole Common Share shall be the closing price of a Common
Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
Notice of Certain Events. (a) In case the Company shall propose
(i) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make any other distribution
to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of
any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares), then,
in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date for
the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution,
or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least 10 days prior to
the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of
such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section
11(a)(ii) hereof.
Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent)
as follows:
Crompton & Knowles Corporation
One Station Place, Metro Center
Stamford, Connecticut 06902
Attention: Clerk
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburg, Pennsylvania 15258-0001
Attention: Corporate Trust Group, Room 3450
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Company.
Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to
make any other provisions with respect to the Rights which the
Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and
the Rights Agent; provided, however, that from and after such
time as any Person becomes an Acquiring Person, this Agreement
shall not be amended in any manner which would adversely affect
the interests of the holders of Rights. Without limiting the
foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower
the thresholds set forth in Sections 1(a) and 3(a) hereof from
20% to not less than the greater of (i) any percentage greater
than the largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to
the terms of any such plan) and (ii) 10%.
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.
Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common
Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares).
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.
Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of
the Commonwealth of Massachusetts and for all purposes shall be
governed by and construed in accordance with the laws of such
Commonwealth applicable to contracts to be made and performed
entirely within such Commonwealth.
Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of
the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be
hereunto affixed and to be attested all as of the day and year
first above written.
CROMPTON & KNOWLES CORPORATION
Attest:
By By
MELLON BANK, N.A.
Attest:
By By
Exhibit A
FORM
of
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of CROMPTON & KNOWLES CORPORATION
(Pursuant to Chapter 156B, Section 26 of the
General Laws of the Commonwealth of Massachusetts)
____________________
We, Vincent A. Calarco, Chairman, Chief Executive Officer and
President, and Edward J. Waite, III, Clerk, of Crompton & Knowles
Corporation, a corporation organized and existing under the
General Laws of the Commonwealth of Massachusetts (hereinafter
called the "Corporation"), located at One Station Place, Metro
Center, Stamford, Connecticut 06902, do hereby certify that at a
meeting of the directors of the Corporation held on July 20,
1988, the following vote establishing and designating a series of
a class of stock and determining the relative rights and
preferences thereof was duly adopted.
VOTED, that pursuant to the authority granted to and vested in
the Board of Directors of the Corporation (hereinafter called the
"Board of Directors" or the "Board") in accordance with the
provisions of its Articles of Organization, the Board of
Directors hereby creates a series of Preferred Stock, without par
value (the "Preferred Stock"), of the Corporation and hereby
states the designation and number of shares, and fixes the
relative rights, preferences and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares
constituting the Series A Preferred Stock shall be 67,000. Such
number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce
the number of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into Series A
Preferred Stock.
Dividends and Distributions.
Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of shares of Common Stock, par value
$1.00 per share (the "Common Stock"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1 or
(b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lessor number of shares
of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares of
Common Stock); provided, that, in the event no dividend or
distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1
per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment
thereof.
Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Except as otherwise provided herein, in any other Certificate of
Vote of Directors creating a series of Preferred Stock or any
similar stock, in the Articles of Organization or by law, the
holders of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as
one class on all matters submitted to a vote of shareholders of
the Corporation.
Except as set forth herein, in the Articles of Organization or as
otherwise provided by law, holders of Series A Preferred Stock
shall have no voting rights.
Certain Restrictions.
Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares
of Series A Preferred Stock outstanding shall have been paid in
full, the Corporation shall not:
declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock; provided, that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation
or winding up) to the Series A Preferred Stock; or
redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Organization, in any other
Certificate of Vote of Directors creating a series of Preferred
Stock or any similar stock or as otherwise required by law.
Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall
have received $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment; provided, that the holders
of shares of Series A Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares of stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock
and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property,
then in any such case each share of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Redemption. The shares of Series A Preferred Stock shall not be
redeemable.
Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior
to all series of any other class of the Corporation's Preferred
Stock.
Amendment. The Articles of Organization of the Corporation shall
not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the shares of
Series A Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together
as a single class.
<PAGE>
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have
hereunto signed our names, this ___ day of __________ in the year
1988.
Chairman, Chief Executive
Officer and President
Clerk
Exhibit B
Form of Right Certificate
Certificate No. R-
_____ Rights
NOT EXERCISABLE AFTER AUGUST 4, 2008 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUB-
JECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
CROMPTON & KNOWLES 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
July 20, 1988 (the "Rights Agreement"), between Crompton &
Knowles Corporation, a Massachusetts corporation (the "Company"),
and Mellon Bank, N.A. (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York
City time, on August 4, 2008 at the office of the Rights Agent
designated for such purpose, or at the office of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, without
par value (the "Preferred Shares"), of the Company, at a purchase
price of $800 per one one-hundredth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be
purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of
January 13, 1998, based on the Preferred Shares as constituted at
such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a Preferred Share
which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-
mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate
or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be, and under certain
circumstances are required to be, redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for Preferred Shares or shares of the Company's
Common Stock, par value $1.00 per share.
No fractional Preferred Shares will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed
to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________________ ,
19__.
ATTEST: Crompton & Knowles Corporation
By
Countersigned:
By
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ___________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: , 19__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring
Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
Signature
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right
Certificate.)
To: Crompton & Knowles Corporation
The undersigned hereby irrevocably elects to exercise
________________ Rights represented by this Right Certificate to
purchase the Preferred Shares issuable upon the exercise of such
Rights and requests that certificates for such Preferred Shares
be issued in the name of:
Please insert social security or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ____________, 19__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring
Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
Signature
NOTICE
The signature in the foregoing Forms of Assignment and Election
must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may
be, is not completed, the Company and the Rights Agent will deem
the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to purchase will not be honored.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On July 20, 1988, the Board of Directors of Crompton & Knowles
Corporation (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of
common stock, par value $1.00 per share (the "Common Shares"), of
the Company. The dividend is payable on August 5, 1988 (the
"Record Date") to the shareholders of record on that date. Each
Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating
Preferred Stock, without par value (the "Preferred Shares"), of
the Company at a price of $800 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Mellon
Bank, N.A., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") have acquired beneficial
ownership of 20% or more of the outstanding Common Shares or (ii)
10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person
or group of affiliated or associated persons becomes an Acquiring
Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by
a person or group of 20% or more of such outstanding Common
Shares (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by
such Common Share certificate with a copy of this Summary of
Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Common
Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Share certificates issued
after the Record Date, upon transfer or new issuance of Common
Shares will contain a notation incorporating the Rights Agreement
by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares, outstanding as of the Record
Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer
of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on August 4, 2008 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed by the Company, in each case, as
described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred
Shares at a price, or securities convertible into Preferred
Shares with a conversion price, less than the then current market
price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-
hundredths of a Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock
split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations
or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a
minimum preferential quarterly dividend payment of $1 per share
but will be entitled to an aggregate dividend of 100 times the
dividend declared per Common Share. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made
per Common Share. Each Preferred Share will have 100 votes,
voting together with the Common Shares. Finally, in the event of
any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each
Right should approximate the value of one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provision
will be made so that each holder of a Right will thereafter have
the right to receive, upon the exercise thereof at the then
current exercise price of the Rights, that number of shares of
common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise
price of the Rights. In the event that (i) any person becomes an
Acquiring Person (unless such person first acquires 20% or more
of the outstanding Common Shares by a purchase pursuant to a
tender offer for all of the Common Shares for cash, which
purchase increases such person's beneficial ownership to 80% or
more of the outstanding Common Shares) or (ii) during such time
as there is an Acquiring Person, there shall be a
reclassification of securities or a recapitalization or
reorganization of the Company or other transaction or series of
transactions involving the Company which has the effect of
increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities of the
Company or any of its subsidiaries beneficially owned by the
Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common
Shares having a market value of two times the exercise price of
the Right.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20%
or more of the outstanding Common Shares and prior to the
acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by such person
or group which have become void), in whole or in part, at an
exchange ratio of one Common Share, or one one-hundredth of a
Preferred Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences
and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of
at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may,
at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20%
or more of the outstanding Common Shares, the Board of Directors
of the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish. In addition, if a bidder who
does not beneficially own more than 1% of the Common Shares (and
who has not within the past year owned in excess of 1% of the
Common Shares and, at a time he held such greater than 1% stake,
disclosed, or caused the disclosure of, an intention which
relates to or would result in the acquisition or influence of
control of the Company) proposes to acquire all of the Common
Shares (and all other shares of capital stock of the Company
entitled to vote with the Common Shares in the election of
directors or on mergers, consolidations, sales of all or
substantially all of the Company's assets, liquidations,
dissolutions or windings up) for cash at a price which a
nationally recognized investment banker selected by such bidder
states in writing is fair, and such bidder has obtained written
financing commitments (or otherwise has financing) and complies
with certain procedural requirements, then the Company, upon the
request of the bidder, will hold a special shareholders meeting
to vote on a resolution requesting the Board of Directors to
accept the bidder's proposal. If a majority of the outstanding
shares entitled to vote on the proposal vote in favor of such
resolution, then for a period of 60 days after such meeting the
Rights will be automatically redeemed at the Redemption Price
immediately prior to the consummation of any tender offer for all
of such shares at a price per share in cash equal to or greater
than the price offered by such bidder; provided, however, that no
redemption will be permitted or required after the acquisition by
any person or group of affiliated or associated persons of
beneficial ownership of 20% or more of the outstanding Common
Shares. Immediately upon any redemption of the Rights, the right
to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights,
including an amendment to lower the threshold for exercisability
of the Rights from 20% to not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding
Common Shares then known to the Company to be beneficially owned
by any person or group of affiliated or associated persons and
(ii) 10%, except that from and after such time as any person or
group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of
the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder 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 July __, 1988. A copy of the Rights Agreement
is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
For: Crompton & Knowles Corporation
Contact. Yanis Bibelnieks
Bibelnieks Associates, Inc.
212-949-2295
FOR IMMEDIATE RELEASE
CROMPTON & KNOWLES DECLARES
SHARE PURCHASE RIGHTS DISTIRIBUTION
STAMFORD, Conn., July 20, 1988 -- Crompton & Knowles Corporation
today announced that its Board of Directors has declared a
dividend distribution of one preferred share purchase right on
each outstanding share of its common stock. Crompton & Knowles
said that the rights are designed to assure that all of the
company's shareholders receive fair and equal treatment in the
event of any proposed takeover of the company and to guard
against partial tender offers, squeeze-outs and other abusive
tactics to gain control of the company without paying all
shareholders a control premium. The rights are not being
distributed in response to any specific effort to acquire the
company and the company is not aware of any such effort.
The rights distribution will be made on August 5, 1988, payable
to shareholders of record on that date and will expire in 10
years. Each right will entitle shareholders to buy one one-
hundredth of a share of a new series of preferred stock at an
exercise price of $800.
Details of the rights distribution will be summarized in a letter
to be sent to all Crompton & Knowles shareholders.
Crompton & Knowles is a producer and marketer of specialty
chemicals and equipment.
# # #
Crompton & Knowles Corporation
Vincent A. Calarco
Chairman, President &
Chief Executive Officer
July 20, 1988
To Our Shareholders:
Your Board of Directors today declared a dividend distribution of
Preferred Share Purchase Rights. This letter describes the
Preferred Share Purchase Rights Plan and the Board's reasons for
adopting it.
These Rights contain provisions to protect all shareholders of
the Company 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 which are prevalent these days and which the
Board believes are not in the best interests of shareholders.
These tactics unfairly pressure shareholders, squeeze them out of
their investment without giving them any real choice and deprive
them of the full value of their shares. Over 600 other
companies, including 27% of the companies in the Business Week
1000, 38% of the companies in the Fortune 500 and 46% of the
companies in the Fortune 200, have issued Rights to protect their
shareholders against these tactics. We consider the Rights to be
the best available means of protecting both your right to retain
your equity investment in the Company and the full value of that
investment, while not foreclosing a fair acquisition bid for the
Company.
The Rights are not intended to prevent a takeover of the Company
and will not do so. However, they should deter any attempt to
acquire the Company in a manner or on terms not approved by the
Board. The Rights approved today are designed to deal with the
very serious problem of another person or company using abusive
tactics to deprive the Company's Board and its shareholders of
any real opportunity to determine the destiny of the Company.
The Rights may be redeemed by the Board of Directors at one cent
per Right prior to the accumulation, through open-market
purchases, a tender offer or otherwise, of 20% or more of the
Company's shares by a single acquiror or group and thus they
should not interfere with any merger or business combination
approved by the Board of Directors prior to that time.
In addition, the Rights will be redeemed pursuant to shareholder
action at one cent per Right when certain procedures are complied
with in connection with an acquisition proposal. If a bidder who
does not own more than 1% of the Company's common stock and who
has not within one year prior to making an acquisition proposal
owned in excess of 1% of the common stock and disclosed a plan or
intention to acquire or influence control of the Company,
proposes to buy all of the Company's stock for cash at a price
which a nationally recognized investment banker selected by the
bidder states in writing is fair, and the bidder has obtained
full financing commitments (or otherwise has full financing) to
complete the transaction and complies with certain procedural
requirements, then the Company, upon the request of the bidder,
will hold a special meeting of shareholders to consider a
resolution requesting the Board of Directors to accept the
bidder's proposal. If a majority of the outstanding shares
entitled to vote on the proposal vote in favor of the resolution,
then so long as no person or group acquires 20% or more of the
Company's common stock, the Rights will be automatically redeemed
immediately prior to the consummation of any tender offer
(whether made by the bidder or by anyone else, provided the
tender offer is consummated within 60 days of the special
shareholders meeting) for all of the Company's stock at a price
per share in cash no less than the price offered by the bidder
and approved by the shareholders.
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
with which they were created to deal. They will then operate to
protect you against being deprived of your right to share in the
full measure of the Company's long-term potential.
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 the Company's shareholders without any protection
against unfair treatment by an acquiror -- who, after all, is
seeking his own company's advantage, not yours. Your Board
believes that these Rights represent a sound and reasonable means
of addressing the complex issues of corporate policy created by
the current takeover environment.
The Rights will be issued on August 5, 1988 to shareholders of
record on that date and will expire in 10 years. Initially, the
Rights will not be exercisable, certificates will not be sent to
you, and Rights will automatically trade with the common shares.
However, 10 days after a person or group acquires 20% or more of
the Company's shares, or 10 business days (or such later time as
is set by the Board of Directors) after a person or group
announces an offer the consummation of which would result in such
person or group owning 20% or more of the shares (even if no
purchases actually occur), the Rights will become exercisable and
separate certificates representing the Rights will be
distributed. We expect that the Rights will begin to trade
independently from the Company's shares at that time. At no time
will the Rights have any voting power.
When the Rights first become exercisable, unless a person or
group has acquired 20% or more of the Company's shares, a holder
will be entitled to buy from the Company one one-hundredth of a
share of a new series of preferred stock for $800. If the
Company is involved in a merger or other business combination at
any time after the Rights become exercisable, the Rights will be
modified so as to entitle a holder to buy a number of shares of
common stock of the acquiring company having a market value of
twice the exercise price of each right. For example, if at the
time of the business combination the acquiring company's stock
has a per share value of $75, the holder of each Right would be
entitled to receive 4 shares of the acquiring company's common
stock for $800, i.e., a 50% discount.
If any person or group acquires 20% or more of the Company's
outstanding common stock, otherwise than pursuant to a cash
tender offer for all shares in which such person or group
increases its stake to 80% or more of the outstanding shares of
common stock, the "flip-in" provision of the Rights will be
triggered and the Rights will entitle a holder (other than such
person or any member of such group) to buy a number of additional
shares of common stock of the Company having a market value of
twice the exercise price of each Right. Thus, if, for example, a
person or group were to acquire 25% of the Company's stock, and
such stock were to have a market value per share at the time of
such acquisition equal to $50, the holder of each Right (other
than such person or any member of such group) would be entitled
to receive 6 shares of common stock of the Company for $800.
Following the acquisition by any person or group of 20% or more
of the Company's common stock but prior to the acquisition by a
person or group of a 50% stake, the Board of Directors will also
have the ability to exchange the Rights (other than Rights held
by such person or group), in whole or in part, for one share of
common stock (or one one-hundredth of a share of the new series
of preferred stock) per Right. This provision will have an
economically dilutive effect on the acquiror, and provide a
corresponding benefit to the remaining rightsholders, that is
comparable to the flip-in.
While, as noted above, the distribution of the Rights will not be
taxable to you or the Company, shareholders may recognize taxable
income upon the occurrence of certain subsequent events.
In addition to authorizing the purchase rights, your Board today
authorized the new series of preferred stock purchasable upon
exercise of the Rights. The shares of the new series of
preferred stock will be nonredeemable. Each share will have a
minimum preferential quarterly dividend rate of $1 per share, but
will be entitled to an aggregate dividend of 100 times the
dividend declared on the common shares. In the event of
liquidation, the holders of the new series of preferred stock
will receive a preferred liquidation payment of $100 per share,
but will be entitled to receive an aggregate liquidation payment
equal to ______ times the payment made per share of common stock.
Each share of the new series of preferred stock will have 100
votes, voting together with the common shares. Finally, in the
event of any merger, consolidation or other transaction in which
common shares are exchanged, each share of the new series of
preferred stock will be entitled to receive 100 times the amount
received per common share. These rights are protected by
customary anti-dilution provisions. In the event of issuance of
preferred stock upon exercise of the Rights, in order to
facilitate trading a depositary receipt may be issued for each
one one-hundredth of a share of the new series of preferred
stock. Each depositary receipt would be equivalent to one share
of common stock with respect to participation in dividends and
upon liquidation, subject to a minimum preferential quarterly
dividend of $.01 and a preferential liquidation payment of $1 per
depositary receipt.
In declaring the Rights dividend, we have expressed our
confidence in the future of the Company and our determination
that you, our shareholders, be given every opportunity to
participate fully in that future.
On behalf of the Board of Directors,
Vincent A. Calarco
Chairman, Chief Executive Officer and President
EXHIBIT 23
Consent of Independent Auditors
Board of Directors
Crompton & Knowles Corporation:
We consent to incorporation by reference in this Registration
Statement on Form S-8 of Crompton & Knowles Corporation of: (i)
our report, which includes an explanatory paragraph regarding our
responsibility related to the Company's consolidated statements
of operations, stockholders' equity (deficit) and cash flows for
the year ended December 30, 1995, dated January 29, 1998, and
relates to the consolidated balance sheets of Crompton & Knowles
Corporation and subsidiaries as of December 27, 1997 and December
28, 1996 and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for the two-year
period ended December 27, 1997, which report is incorporated
by reference in the December 27, 1997, annual report on Form 10-K
of Crompton & Knowles Corporation and (ii) our report dated June
23, 1998, relating to the statements of net assets available for
plan benefits of the Crompton & Knowles Corporation Employee
Stock Ownership Plan as of December 31, 1997 and 1996, and the
related statements of changes in net assets available for plan
benefits for the years then ended, and all related schedules,
which report appears in the December 31, 1997, annual report on
Form 11-K of the Crompton & Knowles Employee Stock Ownership
Plan.
/s/KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Stamford, Connecticut
August 24, 1998
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned officers and directors of Crompton &
Knowles Corporation, hereby severally constitute and appoint
Vincent A. Calarco, Charles J. Marsden, and John T. Ferguson II,
and each of them severally, our true and lawful attorneys or
attorney, with full power to them and each of them to execute for
us, and in our names in the capacities indicated below, and to
file with the Securities and Exchange Commission Registration
Statement No.____________ on Form S-8 for The Crompton & Knowles
Corporation Employee Stock Ownership Plan, and any and all
amendments thereto, and to take such other action as such
attorney or attorneys may deem necessary or appropriate in
connection with such Registration Statement.
IN WITNESS WHEREOF, we have signed this Power of Attorney in
the capacities indicated on April 28, 1998.
Signature Title Signature Title
Principal Executive
Officer:
Chairman of the
Board, President,
/s/Vincent A. Calarco CEO & Director /s/Robert A. Fox Director
Vincent A. Calarco Robert A. Fox
Principal Financial /s/Roger L. Headrick Director
Officer: Roger L. Headrick
Senior Vice President,
Chief Financial Officer,
/s/Charles J. Marsden & Director /s/Leo I. Higdon, Jr. Director
Charles J. Marsden Leo I. Higdon, Jr.
Principal Accounting /s/C.A. Piccolo Director
Officer: C.A. Piccolo
Vice President,
/s/Peter Barna Finance /s/Patricia K. Woolf Director
Peter Barna Patricia K. Woolf
/s/James A. Bitonti Director
James A. Bitonti
