<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CROWN CORK & SEAL COMPANY, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1526444
----------------------------------------------- --------------------
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
9300 Ashton Road, Philadelphia, Pennsylvania 19136
----------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
If this Form relates to the If this Form relates to the registration
registration of a class of debt of a class of debt securities and is to
securities and is effective upon become effective simultaneously with the
filing pursuant to General effectiveness of a concurrent
Instruction A(c)(1) please check registration statement under the
the following box. [_] Securities Act of 1933 pursuant to
General Instruction Act A(c)(2) please
check the following box. [_]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ------------------------------
Common Stock Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
Exhibit Index appears on page 7
<PAGE>
Item 1. Description of Securities to be Registered
The Board of Directors of Crown Cork & Seal Company, Inc. (the
"Company") has declared a dividend distribution of one common stock purchase
right (the "Rights") for each outstanding share of common stock, par value $5.00
per share (the "Common Shares"), of the Company to shareholders of record at the
close of business on August 10, 1995 (the "Record Date"). Each Right entitles
the registered holder to purchase from the Company one Common Share (or in
certain circumstances, cash, property or other securities of the Company) at a
purchase price of $200, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and First Chicago Trust Company of New
York, the Rights Agent. Capitalized terms used but not otherwise defined herein
shall have the meaning given such terms in the Rights Agreement.
Initially, the Rights will be evidenced by the certificates
representing Common Shares then outstanding, no separate Right Certificates will
be distributed and the Rights will not be tradeable separate from the Common
Shares. The Rights will become exercisable and will separate from the Common
Shares upon the earlier of (i) ten calendar days after a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the outstanding
Common Shares (the "Shares Acquisition Date") or (ii) ten business days (or a
later date as determined by the Board of Directors or, if there has been an
Adverse Change of Control, by a majority of the Continuing Directors (as such
terms are herein defined)) after the commencement of, or first public
announcement of an intention to commence, a tender offer or exchange offer that
would result in a person or group beneficially owning 15% or more of the
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date").
On May 22, 1995, the Company and Compagnie Generale d'Industrie et de
Participations ("CGIP"), a major shareholder of CarnaudMetalbox ("CMB"),
executed an Exchange Offer Agreement pursuant to which Crown has agreed, subject
to certain terms and conditions, to commence an exchange offer for the shares of
CMB. See Item 5 of the Company's Current Report on Form 8-K, dated June 16,
1995. The Rights Agreement contains provisions which carve CGIP and its
Affiliates and Associates out of the definition of "Acquiring Person" as a
result of CGIP's participation in the CMB exchange offer and in certain other
limited circumstances.
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Share certificates and will be transferred with and only with such Common
Share certificates, (ii) new Common Share certificates issued after the Record
Date will contain in accordance with the Rights Agreement a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on August 10, 2005, unless earlier redeemed or
exchanged by the Company as described below.
2
<PAGE>
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date, and thereafter, the separate Right
Certificates alone will represent the Rights. Except as otherwise provided by
the Rights Agreement or determined by the Board of Directors, only Common Shares
issued prior to the Distribution Date will be issued with Rights.
In the event that a person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Common Shares
(or in certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the Purchase Price of the Right.
Notwithstanding the foregoing, following the occurrence of such an event or any
other Triggering Event (as defined below), all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
After the Shares Acquisition Date, in the event that (i) the Company
consolidates, or merges with, any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding Common Shares of
the Company are exchanged for securities, cash or property of the other person
and the Company is the surviving corporation, or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Purchase Price of the Right. The events set forth in
this paragraph and the preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable, and the number of Common Shares or other
securities, cash or property issuable, upon exercise of the Rights are subject
to customary adjustments from time to time to prevent dilution in the event of
certain changes in the shares of the Company. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
amount to an increase or decrease of at least 1% in the Purchase Price. The
Company may determine not to issue fractional Rights or shares, and in lieu
thereof, an adjustment in cash will be made based on the market value of the
Rights or shares on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (subject to adjustment), at any time before
the close of business on the tenth calendar day following the Shares Acquisition
Date; provided, however, that if the authorization to redeem the Rights occurs
on or after the date of a change in a majority of the Board of Directors of the
Company as a result of a proxy or consent solicitation and a person who was a
participant in such solicitation has stated that such person (or any of its
Affiliates or Associates) has taken or intends to take or may consider taking
actions that would result in such person becoming an Acquiring Person or cause
the occurrence of a Triggering Event (the existence of these circumstances being
an "Adverse Change of Control"), then the redemption of the Rights will require
the approval of a majority of the Continuing Directors. Immediately upon the
action of the Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to receive
the redemption price.
3
<PAGE>
"Continuing Director" means (i) any member of the Board of Directors
of the Company, while such person is a member of the Board, who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
was a member of the Board prior to the Record Date, or (ii) any person who
subsequently becomes a member of the Board who, while such person is a member of
the Board, is not an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by any person of 50% or more of the outstanding Common Shares,
the Board of Directors of the Company may exchange the then outstanding and
exercisable Rights (other than Rights owned by an Acquiring Person, which will
have become null and void), in whole or in part, for Common Shares, each Right
being exchangeable for one Common Share, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the earliest of (i) the Distribution
Date, (ii) a Triggering Event or (iii) an Adverse Change of Control. After the
first to occur of such events, the provisions of the Rights Agreement may be
amended with the approval of a majority of the Continuing Directors in order (x)
to make changes that do not adversely affect the interests of holders of the
Rights (other than the interests of any Acquiring Person), (y) to cure any
ambiguity or correct or supplement any provision which may be defective or
inconsistent with other provisions contained in the Rights Agreement, or (z) to
shorten or lengthen any time period under the Rights Agreement, but after (i)
the Distribution Date, (ii) a Triggering Event or (iii) an Adverse Change of
Control, no time period relating to redemption of the Rights may be lengthened
so as to make the Rights redeemable at a time at which the Rights had not then
been redeemable and no other time period may be lengthened unless for the
purpose of protecting, enhancing or clarifying the rights or benefits of holders
of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
Accordingly, the existence of the Rights may deter certain acquirors from making
takeover proposals or tender offers. However, the Rights help ensure that the
Company's shareholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The execution of the Rights Agreement by the
Company is not in response to any specific takeover threat or proposal, but is a
precaution taken to protect the rights of the Company's shareholders.
A copy of the Rights Agreement, dated as of August 7, 1995, between
the Company and the Rights Agent, specifying the terms of the Rights (which
Rights Agreement includes as exhibits the form of Right Certificate and the
Summary of Rights to Purchase
4
<PAGE>
Common Stock) is attached hereto as an exhibit and is incorporated herein by
reference. The foregoing description of the Rights is qualified by reference to
such exhibit.
Item 2. Exhibits
1 and 2. Rights Agreement, dated as of August 7, 1995, between Crown
Cork & Seal Company, Inc. and First Chicago Trust Company of New York, which
includes as exhibits the form of Right Certificate as Exhibit A and the Summary
of Rights to Purchase Common Stock as Exhibit B.
5
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: August 10, 1995
CROWN CORK & SEAL COMPANY, INC.
By: /s/ Richard L. Krzyzanowski
--------------------------------
Richard L. Krzyzanowski
Secretary
6
<PAGE>
EXHIBIT INDEX
These exhibits are numbered in accordance with the exhibit numbers assigned in
Item 2 of Form 8-A.
<TABLE>
Sequential
Exhibit No. Description Page Number
----------- ----------- -----------
<C> <S> <C>
1 & 2 Rights Agreement, dated 8
as of August 7, 1995,
between Crown Cork
& Seal Company, Inc. and
First Chicago Trust
Company of New York,
which includes as exhibits
the form of Right
Certificate as Exhibit A
and the Summary of Rights
to Purchase Common Stock
as Exhibit B.
</TABLE>
7
<PAGE>
_______________________________________________________________________
CROWN CORK & SEAL COMPANY, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
RIGHTS AGREEMENT
Dated as of August 7, 1995
_______________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. Certain Definitions........................................... 1
SECTION 2. Appointment of Rights Agent................................... 7
SECTION 3. Issue of Right Certificates................................... 7
SECTION 4. Form of Right Certificates.................................... 10
SECTION 5. Countersignature and Registration............................. 12
SECTION 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.................................................. 12
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. 14
SECTION 8. Cancellation and Destruction of Right Certificates............ 16
SECTION 9. Reservation and Availability of Common Shares................. 17
SECTION 10. Common Shares Record Date..................................... 19
SECTION 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights........................................................ 20
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.... 30
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power......................................................... 31
SECTION 14. Fractional Rights and Fractional Shares....................... 35
SECTION 15. Rights of Action.............................................. 36
SECTION 16. Agreement of Right Holders.................................... 36
SECTION 17. Right Certificate Holder Not Deemed a Shareholder............. 37
SECTION 18. Concerning the Rights Agent................................... 38
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent..... 39
SECTION 20. Duties of Rights Agent........................................ 39
SECTION 21. Change of Rights Agent........................................ 42
SECTION 22. Issuance of New Right Certificates............................ 43
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 23. Redemption and Termination.................................... 44
SECTION 24. Exchange...................................................... 46
SECTION 25. Notice of Certain Events...................................... 47
SECTION 26. Notices....................................................... 48
SECTION 27. Supplements and Amendments.................................... 49
SECTION 28. Successors.................................................... 51
SECTION 29. Determinations and Actions by the Board of Directors.......... 51
SECTION 30. Benefits of this Agreement.................................... 52
SECTION 31. Severability.................................................. 52
SECTION 32. Governing Law................................................. 52
SECTION 33. Counterparts.................................................. 52
SECTION 34. Descriptive Headings.......................................... 53
Exhibit A Form of Right Certificate
Exhibit B Form of Summary of Rights
</TABLE>
ii
<PAGE>
RIGHTS AGREEMENT
Rights Agreement, dated as of August 7, 1995, between Crown Cork &
Seal Company, Inc., a Pennsylvania corporation (the "Company"), and First
Chicago Trust Company of New York as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one common share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company outstanding as of the Close
of Business on August 10, 1995 (the "Record Date"), each Right initially
representing the right to purchase one Common Share, upon the terms and subject
to the conditions herein set forth, and has further authorized (i) 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 (as such term
is defined in Section 3), the Redemption Date and the Final Expiration Date (as
such terms are defined in Section 7) and (ii) in certain circumstances provided
in Section 22, the issuance of one Right with respect to each Common Share that
shall become outstanding between the Distribution Date and the earlier of the
Redemption Date and the Final Expiration Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, and intending to be legally bound hereby, the
parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares then outstanding, but shall not include any
Exempt Person (as hereinafter defined). Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an acquisition of
beneficial ownership of Common Shares by the Company that, by reducing the
number of Common Shares (or securities convertible into or exchangeable for
<PAGE>
Common Shares) outstanding, increases the percentage of Common Shares
beneficially owned by such Person (together with all Affiliates and Associates
of such Person) to 15% or more of the Common Shares then outstanding; provided,
however, that if any Person (other than Exempt Persons) shall become the
Beneficial Owner of 15% or more of the Common Shares 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 an "Acquiring Person." Notwithstanding the
foregoing, (i) CGIP shall not be or become an "Acquiring Person" as the result
of its participation in the exchange offers (the "Offers") made pursuant to the
Exchange Offer Agreement, (ii) during the Standstill Period and so long as there
does not exist a Designated Shareholder Breach (as such terms are defined in the
Shareholders Agreement), CGIP shall not be or become an "Acquiring Person" (or
an Associate or Affiliate of an Acquiring Person) as the result of any action
permitted to be taken by CGIP pursuant to the Shareholders Agreement to the
extent that CGIP would as a result of such action otherwise be deemed to be an
Acquiring Person, and no Associate or Affiliate of CGIP shall be or become an
"Acquiring Person" as the result of any action permitted to be taken by CGIP
pursuant to the Shareholders Agreement to the extent that such Associate or
Affiliate would as a result of such action otherwise be deemed to be an
Acquiring Person; and (iii) after the expiration of the Standstill Period, CGIP
shall be an "Acquiring Person" only (unless there exists a Designated
Shareholder Breach at or immediately prior to the time of such expiration, in
which case CGIP shall be an "Acquiring Person" to the extent it would otherwise
be deemed such) if it shall, after such expiration, become the Beneficial Owner
of any additional Common Shares (other than any securities of the Company
granted by the Company to a director of the Company (by virtue of such person's
position as a director of the Company) who is an Affiliate or Associate of CGIP)
and, after giving effect to the acquisition of such additional Common Shares,
shall be the Beneficial Owner of 15% or more of the Common Shares then
outstanding; provided that, for purposes of this clause (iii), if the Standstill
Period has expired pursuant to clauses (ii) through (viii) of Section 2.1 of the
Shareholders Agreement and there does not exist a Designated Shareholder Breach
at or immediately prior to the time of such expiration, CGIP shall not be an
"Acquiring Person" to the extent (x) it has acquired beneficial ownership of
such
-2-
<PAGE>
additional Common Shares within eighteen months after a decrease in CGIP's
beneficial ownership of Common Shares, which decrease results from the primary
issuance by the Company of Common Shares (or securities convertible into, or
exchangeable for, Common Shares) or the sale by the Company of Common Shares (or
securities convertible into, or exchangeable for, Common Shares) held in
treasury (a "Dilutive Issuance"), and (y) after giving effect to such
acquisition of beneficial ownership of additional Common Shares pursuant to
clause (x), CGIP is not the Beneficial Owner of Common Shares in excess of the
Specified Percentage of Common Shares outstanding (the "Specified Percentage"
shall be the lesser of (1) the percentage of outstanding Common Shares
beneficially owned by CGIP immediately prior to such Dilutive Issuance and (2)
the percentage of outstanding Common Shares represented by the percentage set
forth in Section 3.1(a)(x) of the Shareholders Agreement). 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 first sentence 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, solely as a result of such inadvertent acquisition, be deemed to be
an "Acquiring Person" for any purpose of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as such rule is in effect on the Record Date.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own," and shall be deemed to have "beneficial ownership"
of, any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly has
-3-
<PAGE>
(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 (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own (1) 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, (2) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event, or (3) securities issuable
upon exercise of Rights from and after the occurrence of a Triggering Event, if
such Rights were acquired by such Person or such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or Section
22 or pursuant to Section 11(a)(i) in connection with an adjustment made with
respect to any of the Rights heretofore specified in this clause (3); or
(B) the right to vote or otherwise has "beneficial
ownership" (as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, pursuant to this subparagraph (B), any security as a result of any
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding (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 of the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(ii) that are beneficially owned, including pursuant to
subparagraphs (i)(A) and (B) of this subsection (c), directly or
indirectly, by any other Person (or Affiliate or Associate thereof)
with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
-4-
<PAGE>
(whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the
provision in subparagraph (i)(B) of this subsection (c)) or disposing
of any securities of the Company;
provided, however, that nothing in this subsection (c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the Commonwealth of Pennsylvania are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Philadelphia, Pennsylvania time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., Philadelphia, Pennsylvania
time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the shares of Common Stock, par value $5.00 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
Person or, if such Person is a Subsidiary of another Person, the Person or
Persons that ultimately control such first-mentioned Person.
(g) "CGIP" shall mean Compagnie Generale d'Industrie et de
Participations, a societe anonyme organized under the laws of the Republic of
France.
(h) "Distribution Date" shall have the meaning set forth in Section 3.
-5-
<PAGE>
(i) "Exchange Offer Agreement" shall mean the Exchange Offer Agreement
dated as of May 22, 1995, between the Company and CGIP, as the same may be
amended from time to time.
(j) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or of any Subsidiary
of the Company or, (iv) any entity holding Common Shares for the benefit of
present or future participants (e.g. a trustee or plan fiduciary) pursuant to
the terms of any such plan.
(k) "Final Expiration Date" shall have the meaning set forth in
Section 7.
(l) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(m) "Redemption Date" shall have the meaning set forth in Section 7.
(n) "Section 11(a)(ii) Event" shall mean the event described in
Section 11(a)(ii).
(o) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(p) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
-6-
<PAGE>
(q) "Shareholders Agreement" shall mean the Shareholders Agreement
between the Company and CGIP, as the same may be amended from time to time,
initially entered into pursuant to the Exchange Offer Agreement.
(r) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
(s) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(and such holders shall, in accordance with Section 3, 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. In the event the Company appoints one or more co-Rights
Agents, the respective duties of the Rights Agent and any co-Rights Agents shall
be as the Company shall determine.
SECTION 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
calendar day after the Shares Acquisition Date or (ii) the Close of Business on
the tenth Business Day (or such later date as the Board of Directors shall
determine; provided that if such determination occurs on or after the date of an
Adverse Change of Control, then such date may be extended only if there are
Continuing Directors in office and such extension is authorized by a majority of
such Continuing Directors) after the date that a tender or exchange offer by any
Person (other than an Exempt Person) is first published or sent or given within
the meaning of Rule 14d-4(a) of
-7-
<PAGE>
the General Rules and Regulations under the Exchange Act, the consummation of
which would result in beneficial ownership by a Person (other than an Exempt
Person) of 15% or more of the outstanding Common Shares (including any such date
that is after the date of this Agreement and prior to the issuance of the
Rights) (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) 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 Rights Agent will send, by first-class, insured, postage-
prepaid mail, to each record holder of Common Shares as of the Close of Business
on the Distribution Date, or, with respect to Common Shares so issued on or
after the Distribution Date (unless otherwise provided with respect thereto as
aforesaid), to the record holder of such Common Shares on the date of issuance,
at the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit A, evidencing one Right for
each Common Share so held, subject to adjustments as provided herein. In the
event that an adjustment in the number of Rights per Common Share has been made
pursuant to Section 11(i) hereof, at the time of distribution of the Right
Certificates, the Company may make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit B (the "Summary of Rights"), 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 for Common Shares registered
-8-
<PAGE>
in the names of the holders thereof (together with a copy of the Summary of
Rights). Until the earlier of the Distribution Date or 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.
(c) Rights shall be issued in respect of all Common Shares which are
issued (whether originally issued or delivered from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or Final
Expiration Date, or in certain circumstances provided in Section 22, after the
Distribution Date. Certificates for Common Shares issued after the Record Date
but prior to the earlier of the Distribution Date or the Final Expiration Date
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) 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 Crown Cork &
Seal Company, Inc. (the "Company") and First Chicago Trust Company of
New York as Rights Agent, dated as of August 7, 1995 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly following
receipt of a written request therefor.
-9-
<PAGE>
Under certain circumstances, Rights beneficially owned by Acquiring
Persons or Associates or Affiliates of Acquiring Persons (as such
terms are defined in the Rights Agreement) and any subsequent holder
of such Rights may become null and void.
With respect to such certificates bearing the foregoing legend, until the
earlier of the Distribution Date or the Final Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Shares
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates. In the
event that the Company purchases or acquires any Common Shares after the Record
Date but prior to the earlier of the Distribution Date or the Final Expiration
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.
SECTION 4. Form of Right Certificates. (a) The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed on
the reverse thereof) shall be substantially in the form of Exhibit A and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed or any securities association on whose
interdealer quotation system the Rights may from time to time be authorized for
quotation, or to conform to usage. Subject to the provisions of Section 22, the
Right Certificates that are issued in respect of Common Shares that were issued
and outstanding as of the Record Date, shall be dated as of the Record Date, and
all Right Certificates that are issued in respect of other Common Shares shall
be dated as of the respective dates of issuance of such Common Shares, and in
either case on their faces shall entitle
-10-
<PAGE>
the holders thereof to purchase such number of Common Shares as shall be set
forth therein at the price per Common Share set forth therein (the "Purchase
Price"), but the number of such Common Shares and the Purchase Price shall be
subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3 or Section 22
that represents Rights beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or any Associate or Affiliate of an Acquiring Person) which becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or any Associate or Affiliate of an Acquiring Person) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) to holders of equity interests in such Acquiring Person
(or of such Associate or Affiliate) or to any Person with whom the Acquiring
Person has any agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer that the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of Section 7(e) or Section 11 hereof,
and any Right Certificate issued pursuant to Section 6 or Section 11 upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or an Associate of an Acquiring Person. This Right
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of the Rights
Agreement.
The absence of the foregoing legend on any Right Certificate shall in
no way affect any of the other provisions of this Agreement, including, without
limitation, the provisions
-11-
<PAGE>
of Section 7(e). The Company shall instruct the Rights Agent in writing of the
Rights which should be so legended and shall supply the Rights Agent with such
legended Right Certificates.
SECTION 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its chairman, its
president or a vice president, either manually or by facsimile signature, and
have affixed thereto the Company's seal or a facsimile thereof that shall be
attested by the secretary, or an assistant secretary or treasurer, of the
Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the 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.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the office of the Rights Agent designated for such
purposes, 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 as evidenced on the face
of each of the Right Certificates and the date and certificate number of each of
the Right Certificates.
SECTION 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 4(b), Section 7(e), Section 11 and Section
14, at any time after the Close of Business on the
-12-
<PAGE>
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 may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of Common Shares (or other securities or other assets, as
the case may be) 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 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, with
the form of assignment and certificate appropriately executed, at the office of
the Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e), Section 11 and Section 14, 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.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a 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 countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
-13-
<PAGE>
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a))
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for
each Common Share (or other securities, cash or other assets, as the case may
be) as to which the Rights are exercised, at or prior to the earliest of (i) the
Close of Business on August 10, 2005 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price for each Common Share pursuant to the exercise
of a Right shall initially be $200, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 and shall be payable in lawful money of
the United States of America, subject to paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares (or other securities or other
assets, as the case may be) 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(e) (as determined by the Rights Agent)
the Rights Agent shall, subject to Section 20(j), thereupon promptly (i) (A)
requisition from any transfer agent of the Common Shares certificates for the
number of Common Shares to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of Common Shares usable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent
-14-
<PAGE>
depositary receipts representing such number of Common Shares to be purchased
(in which case certificates for the Common Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
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 interests in shares in accordance with Section
14, (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
Certificates 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. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii)) may be made in cash or by certified or bank check or money order
payable to the order of the Company. In the event the Company is obligated to
issue other securities (including Common Shares) of the Company or distribute
other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities or property are available
for distribution by the Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that only
whole Common Shares would be issued.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14.
(e) Notwithstanding anything to the contrary in this Agreement, from
and after the first occurrence of any Triggering Event, any Rights beneficially
owned by (i) any Acquiring Person (or any Associate or Affiliate of an Acquiring
Person), (ii) a transferee of an Acquiring Person (or any Associate or Affiliate
of an Acquiring Person) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or any Associate
-15-
<PAGE>
or Affiliate of an Acquiring Person) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) to
holders of equity interests in such Acquiring Person (or of such Associate or
Affiliate) or to any Person with whom the Acquiring Person has any agreement,
arrangement or understanding regarding the transferred Rights, or (B) a transfer
that the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall be null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of Rights or any other Person as a result of its
failure to make any determination under this Section 7(e) or such Section 4(b)
with respect to any Acquiring Person or an Associate or Affiliate of an
Acquiring Person or their transferees.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
transfer or exercise unless such registered holder shall have (i) completed and
signed the certificate following the form of assignment or election to purchase
set forth on the reverse side of the Right Certificate surrendered for such
assignment or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. Cancellation and Destruction of 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,
-16-
<PAGE>
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.
SECTION 9. Reservation and Availability of Common Shares. (a)
Subject to the Company's rights under Section 11(a)(iii) hereof to otherwise
fulfill its obligations hereunder, the Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued
Common Shares or any Common Shares held in its treasury, the number of Common
Shares that will be sufficient to permit the exercise in full of all outstanding
Rights pursuant to the terms of this Agreement; provided, however, that such
action need not be taken with respect to Common Shares (or other securities)
issuable upon exercise of the Rights until after such time as the Rights become
exercisable, and with respect to Common Shares (or other securities) issuable
upon occurrence of a Triggering Event until the occurrence of such event.
(b) So long as the Common Shares issuable upon the exercise of Rights
may be listed on any United States national securities exchange, the Paris Stock
Exchange or the London Stock Exchange or authorized for quotation on any
interdealer quotation system of any securities association, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
or quoted on such system upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as is
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Sections 11(a)(ii)
(or Section 11(a)(iii))and 13 hereof), or as soon as is
-17-
<PAGE>
required by law following the Distribution Date, as the case may be, a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Common Shares or other securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities or (B) the Final Expiration Date. The Company will also take
such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states and other appropriate
jurisdictions in connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this paragraph,
the exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective and to take such actions under such
other securities or blue sky laws and permit them to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained or the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares or other securities
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that, subject to
Sections 6 and 7(c), it will pay when due and payable any and all foreign,
federal and state transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates or of
-18-
<PAGE>
any Common Shares (or other securities or property) upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax that may be
payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or depositary receipts
for the Common Shares (or other securities or property) in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates or depositary
receipts for Common Shares (or other securities or property) 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 satisfaction that no such tax is
due.
SECTION 10. Common Shares Record Date. Each person in whose name any
certificate for Common Shares (or other securities) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Common Shares (or other securities) represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Common Shares (or other
securities) transfer books of the Company are closed or a date on which the
exercisability of the Rights is suspended pursuant to Section 9(c), such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, as applicable, the next succeeding Business Day on
which the Common Shares (or other securities) transfer books of the Company are
open or the next succeeding Business Day on which such suspension is no longer
in effect. Prior to the exercise of the Rights evidenced thereby, the holder of
a Right Certificate, as such, shall not be entitled to any rights of a holder of
Common Shares (or other securities) 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.
-19-
<PAGE>
SECTION 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and kind of securities covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares, (C) combine the outstanding
Common Shares into a smaller number of Common Shares or (D) issue any shares of
its capital stock in a reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e), 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 that, if such
Right had been exercised immediately prior to such date and at a time when the
Common Shares (or other capital stock, as the case may be) transfer books of the
Company were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person (other than an Exempt Person), at
any time after the date of this Agreement, is or becomes an Acquiring Person,
then, promptly following the occurrence of such Section 11(a)(ii) Event, proper
provision shall be made so that each holder of a Right, except as provided in
Section 7(e), shall thereafter have a right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
in
-20-
<PAGE>
lieu of the number of Common Shares for which a Right was theretofore
exercisable, such number of Common Shares as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the number of Common Shares
for which a Right was exercisable immediately prior to the first occurrence of
the Section 11(a)(ii) Event and (y) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by 50% of the current per
share market price of the Common Shares (determined pursuant to Section 11(d))
on the date of the occurrence of the Section 11(a)(ii) Event (such number of
shares is herein called the "Adjustment Shares"); provided, however, that the
Purchase Price and number of Adjustment Shares shall be further adjusted as
provided in this Agreement to reflect any event occurring after the date of such
first occurrence.
(iii) In the event that after the Distribution Date or, in the
case of a Section 11(a)(ii) Event after the date of the occurrence of such
Section 11(a)(ii) Event, the number of Common Shares which is authorized by the
Company's articles of incorporation but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights is not sufficient to permit
the exercise in full of the Rights, the Company shall: (A) determine the excess
of (1) the value of the Common Shares, or Adjustment Shares in accordance with
Section 11(a)(ii), as the case may be, issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase Price (such excess is herein called
the "Spread"), and (B) with respect to each Right, make adequate provision to
substitute for the Common Shares, or Adjustment Shares, as the case may be, upon
exercise of the Rights, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Shares of the same or different class or other equity securities of the
Company (including, without limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Company has deemed to have
substantially the same economic value as Common Shares (such shares or units of
shares of preferred stock are referred to herein as "common share
equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally
-21-
<PAGE>
recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the Distribution Date, or in the case of a Section 11(a)(ii) Event the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date
on which the Company's right of redemption pursuant to Section 23(a) expires
(the later of (x), and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread. If the
Board of Directors of the Company shall determine in good faith that it is
likely that sufficient additional Common Shares could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than one hundred twenty
(120) days after the Distribution Date or the Section 11(a)(ii) Trigger Date, as
the case may be, in order that the Company may seek shareholder approval for the
authorization of such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that some
action should be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional securities
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common Shares shall be the
current per share market price per Common Share (as defined in Section 11(d)) on
the Distribution Date or the Section 11(a)(ii) Trigger Date, as the case may be,
and the value of any "common share equivalent" shall be deemed to have the same
value as the Common Shares on such date.
-22-
<PAGE>
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Shares, or shares having the
same rights, privileges and preferences as Common Shares ("equivalent common
shares"), or securities convertible into Common Shares or equivalent common
shares at a price per Common Share or per equivalent common share, or having a
conversion price per share, if a security convertible into Common Shares or
equivalent common shares, less than the current per share market price of the
Common Shares (as determined pursuant to Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares and/or equivalent
common shares so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of Common Shares
outstanding on such record date plus the number of additional Common Shares
and/or equivalent common shares to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid in 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 and shall be binding on the Rights Agent and the holders of
Rights. Common Shares owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date) is fixed, and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.
-23-
<PAGE>
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash or assets (other than
a regular quarterly cash dividend out of the earnings or retained earnings of
the Company or a dividend payable in Common Shares but including a dividend
payable in stock other than Common Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price of the Common
Shares (as determined pursuant to Section 11(d)) on such record date less the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights) of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one Common
Share and the denominator of which shall be such current per share market price
of the Common Shares. 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 that would
then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder (other than
computations made pursuant to Section 11(a)(iii) hereof), the "current per share
market price" of the Common Shares on any date shall be deemed to be the average
of the daily closing prices per share of such Common Shares for the twenty (20)
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the "current per share market price" of Common Shares on any
date shall be deemed to be the average of the daily closing prices per share of
such Common Shares for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the current per
share market price of the Common Shares is determined
-24-
<PAGE>
during a period following the announcement by the issuer of such Common Shares
of (1) a dividend or distribution on such Common Shares payable in such Common
Shares or securities convertible into such Common Shares (other than the
Rights), or (2) any subdivision, combination or reclassification of such Common
Shares, and prior to the expiration of twenty (20) Trading Days, or ten (10)
Trading Days, as set forth above, after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common Shares are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal United States national securities exchange on
which the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any United States national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the United States over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use, or, if on any such
date the Common Shares are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a United States professional
market maker making a market in the Common Shares selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Common Shares, the fair value of the Common Shares on such date as
determined in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal United States
national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any United States national securities
exchange, a Business Day. If the Common Shares are not publicly held or not so
listed or traded, "current per share market price" shall mean the fair value per
share as
-25-
<PAGE>
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments that by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one ten-thousandth of a Common Share or other share, as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which mandates such
adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Common Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Common Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections
-26-
<PAGE>
11(b) and (c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Common Shares obtained by (i) multiplying (x) the
number of Common Shares covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The 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 ten (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 Rights on such record date Right Certificates evidencing,
subject to Section 14, 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
-27-
<PAGE>
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares that were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Common Shares
issuable upon exercise of the Rights, the Company shall take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Common Shares
at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Common Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Common Shares and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i)
-28-
<PAGE>
consolidation or subdivision of the Common Shares, (ii) issuance wholly for cash
of any Common Shares at less than the current market price, (iii) issuance
wholly for cash of Common Shares or other securities that by their terms are
convertible into or exchangeable for Common Shares, (iv) dividends on Common
Shares payable in Common Shares or (v) issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to
holders of its Common Shares shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into or engage in a share exchange with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 25% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger, share exchange or sale
there are any rights, warrants, or other instruments or securities outstanding
or agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger, share
exchange or sale, the shareholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it shall not, except as permitted by Section 23, Section 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
-29-
<PAGE>
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution Date consolidate with, or merge with or into, any
other Person for the primary purpose of a change of domicile of the Company,
and, in connection with such consolidation or merger, all of the outstanding
Common Shares shall be changed into or exchanged for Common Shares of the
surviving corporation of such consolidation or merger (the "Surviving
Corporation"), then proper provision shall be made so that Rights shall be
associated with each Common Share of the Surviving Corporation, except as
provided in Section 7(e) hereof, such that the number of Rights associated with
each Common Share of the Surviving Corporation following any such event shall
equal the result obtained by multiplying the number of Rights associated with
each Common Share immediately prior to such event by a fraction the numerator of
which shall be the total number of Common Shares outstanding immediately prior
to the occurrence of the event and the denominator of which shall be the total
number of Common Shares of the Surviving Corporation which the Common Shares
were changed into or exchanged for pursuant to the consolidation or merger.
Following such a consolidation or merger, this Agreement shall remain in effect
and all references to the Company shall be deemed to be references to the
Surviving Corporation.
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares a
copy of such certificate and (c) mail a brief summary thereof to each holder of
record of a Right Certificate (or, if prior to the Distribution Date, to each
holder of record of a certificate representing Common Shares) in accordance with
Section 25. The Rights Agent shall be fully protected in relying on such
certificate and on any adjustment contained therein and shall not be deemed to
have knowledge of any adjustment unless and until it shall have received such
certificate.
-30-
<PAGE>
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Shares Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall engage in a share exchange with or
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such share exchange,
consolidation or merger and, in connection with such share exchange,
consolidation or merger, all or part of the outstanding Common Shares shall be
changed into or exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case proper
provision shall be made so that
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Principal Party (as
such term is hereinafter defined), not subject to any liens, encumbrances,
rights of call, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of Common Shares for which a Right was
exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event by
the number of
-31-
<PAGE>
Common Shares for which a Right was exercisable immediately prior to such
first occurrence of a Section 11(a)(ii) Event) and (2) dividing that
product (such product following the first occurrence of a Section 13 Event
shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the current per share market price of
the Common Shares of such Principal Party (determined pursuant to Section
11(d)) on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of Common Shares) in
connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
If, in the case of a transaction of the kind described in clause (z)
of the first sentence of this Section 13(a), the Person or Persons to whom
assets or earning power are sold or otherwise transferred are individuals, then
the preceding sentences of this Section 13(a) shall be inapplicable, and the
Company shall require as a condition to such sale of transfer that such Person
or Persons pay to each holder of a Right Certificate, upon its surrender to the
Rights
-32-
<PAGE>
Agent and in exchange therefor (without requiring payment by such holder), cash
in the amount determined by multiplying the then current Purchase Price by the
number of Common Shares for which a Right is then exercisable.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the issuer
of any securities for or into which Common Shares of the Company are
converted in such share exchange, merger or consolidation, and if no
securities are so issued, the Person that is the other party to such merger
or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of common
stock which have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed
-33-
<PAGE>
and delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any such Section 13
Event, the Principal Party will
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the securities
or blue sky laws of such jurisdictions as may be necessary or appropriate;
and
(iii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive share
exchanges, mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the first occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
-34-
<PAGE>
SECTION 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Right Certificates that 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 United States 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 United States
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the United States 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 United States professional market maker
making a market in the Rights selected by the Board of Directors of the Company.
If on any such date no such market maker is making a market in the Rights the
fair value of the Rights on such date as determined in good faith by the Board
of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to issue certificates that evidence
fractions of Common Shares. In lieu of fractional interests in Common Shares,
the Company shall pay to the registered holders of
-35-
<PAGE>
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Common Share. For purposes of this Section 14(b), the current market value of a
Common Share shall be the closing price of a Common Share (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
(except as provided by this Section 14) upon exercise of a Right.
SECTION 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the 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.
SECTION 16. 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:
-36-
<PAGE>
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
(c) subject to Section 6 and Section 7(f) hereof, 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, subject to Section 7(e), shall be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. 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
-37-
<PAGE>
purpose the holder of the Common Shares or any other securities of the Company
that 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), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 18. Concerning the Rights Agent. (a) The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for 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.
-38-
<PAGE>
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
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. 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 countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name, and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
-39-
<PAGE>
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity or existence of any Acquiring
Person and the determination of "current per share market price") be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the chairman of the board, the president,
any vice president, the secretary, an assistant secretary or the treasurer of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any 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
-40-
<PAGE>
responsible for any adjustment required under the provisions of Section 11 or
Section 13 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Common
Shares to be issued pursuant to this Agreement or any Right Certificate or as to
whether any Common Shares will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the chairman of the board, the president, any vice president, the
secretary or the treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the 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 Person.
-41-
<PAGE>
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 or 2 thereof,
the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
SECTION 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares by registered or certified mail, and to the
holders of the 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 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 giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the holder of record 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
-42-
<PAGE>
any state of the United States so long as such corporation is authorized to do
business as a banking institution, is in good standing, is authorized under such
laws to exercise corporate trust powers, and is subject to supervision or
examination by federal or state authority, and 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 with the predecessor
Rights Agent and each transfer agent of the Common Shares, and mail a notice
thereof in writing to the holders of record of the Right Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
SECTION 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
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. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (a) shall, with
respect to Common Shares so issued or sold (i) pursuant to the exercise of stock
options or under any employee plan or arrangement, (ii) pursuant to the Offers,
or (iii) upon the exercise, conversion or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Right
-43-
<PAGE>
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or to the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustments shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth calendar day
following the Shares Acquisition Date (or, if the Shares Acquisition Date
occurred prior to the Record Date, the Close of Business on the tenth calendar
day following such Record Date) or (ii) the Close of Business on the Final
Expiration Date, redeem all, but not less than all, of the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"); provided, however, that if such authorization occurs on or
after the date of a change (resulting from a proxy or consent solicitation) in a
majority of the directors in office at the commencement of such solicitation,
and any Person who is or was a participant in such solicitation has stated (or
if upon the commencement of such solicitation, a majority of the Board of
Directors of the Company has determined in good faith) that such Person (or any
of its Affiliates or Associates) has taken or intends to take, or may consider
taking, any action that would result in such Person becoming an Acquiring Person
or that would cause the occurrence of a Triggering Event (the existence of the
circumstances described in this proviso being referred to herein as an "Adverse
Change of Control"), then the Rights may be so redeemed only if there are
Continuing Directors (as hereinafter defined) in office and such redemption is
authorized by a majority of such Continuing Directors. Notwithstanding the
foregoing, in the event payment of the Redemption Price to a holder of Rights
would result in the payment of an amount not equal to $.01 or an integral
multiple of $.01, the amount to be paid shall be rounded upward to the next
$.01. "Continuing Director" shall
-44-
<PAGE>
mean (i) any member of the Board of Directors of the Company who, while such
person is a member of the Board, is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an Acquiring Person or
of any such Affiliate or Associate, and was a member of the Board prior to the
Record Date, or (ii) any Person who subsequently becomes a member of the Board
who, while such Person is a member of the Board, is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by a
majority of the Continuing Directors. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption set forth in the first sentence of this Section 23(a) has
expired. The Company, may, at its option, pay the Redemption Price in cash
(whether in United States dollars or in such other currency or currencies as the
Board of Directors may determine), Common Shares (based on the current market
price per share at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) days after action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Shares. Any notice that 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
-45-
<PAGE>
manner other than that specifically set forth in this Section 23 and Section 24
hereof and other than in connection with the purchase of Common Shares prior to
the Distribution Date.
SECTION 24. Exchange.
(a) The Board of Directors of the 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 7(e) hereof) for Common
Shares, each Right being exchangeable for one Common Share, appropriately
adjusted to reflect any transaction specified in Section 11(a)(i) occurring
after the date hereof (such number of Common Shares issuable in exchange for one
Right being referred to herein as the "Exchange Shares"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such exchange
at any time after any Person (other than any Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (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 the Exchange Shares. 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 that 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
-46-
<PAGE>
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) 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 or shall take such other action
specified in Section 11(a)(iii) hereof.
(d) 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 subsection (d), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second and third sentences of Section 11(d) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
SECTION 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its Common Shares or to make any
other distribution to the holders of its Common Shares (other than a regular
quarterly cash dividend) or (ii) to offer to the holders of its Common Shares
rights or warrants to subscribe for or to purchase any additional Common Shares
or shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding Common Shares),
or (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to
-47-
<PAGE>
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 or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions, each of which complies with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action that shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
(i) or (ii) above at least twenty (20) days prior to the record date for
determining holders of the Common Shares for purposes of such action, and in the
case of any such other action, at least twenty (20) days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the Common Shares, whichever shall be the earlier.
(b) In case a Triggering Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 26, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or Section 13 and (ii) all references
in the preceding paragraph to Common Shares shall be deemed thereafter to refer
to Common Shares and/or other securities, if appropriate.
The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote on any such action.
SECTION 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the
-48-
<PAGE>
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:
Crown Cork & Seal Company, Inc.
9300 Ashton Road
Philadelphia, PA 19136
Attention: Richard L. Krzyzanowski
Executive Vice President, Secretary
and General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any 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:
First Chicago Trust Company of New York
Suite 4660
525 Washington Boulevard
Jersey City, NJ 07310
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
SECTION 27. Supplements and Amendments. Prior to the earliest of (i)
the Distribution Date, (ii) the occurrence of a Triggering Event or (iii) an
Adverse Change of Control, the Company may and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
(including supplements or amendments that may be
-49-
<PAGE>
deemed to affect the interests of the holders of Right Certificates adversely)
without the approval of any holders of certificates representing Common Shares
and associated Rights. From and after the earliest of (i) the Distribution
Date, (ii) the occurrence of a Triggering Event or (iii) an Adverse Change of
Control, the Company may and the Rights Agent shall, if the Company so directs
(upon approval of a majority of the Continuing Directors then in office),
supplement or amend this Agreement without the approval of any holders of Right
Certificates (x) in any manner that will not adversely affect the interests of
the holders of Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person), or (y) in order to cure
any ambiguity or to correct or supplement any provision contained herein which,
in the good faith determination of a majority of the Continuing Directors then
in office, may be defective or inconsistent with the other provisions contained
herein, or (z) to shorten or lengthen any time period hereunder; provided,
however, that, from and after the earliest of (i) the Distribution Date, (ii)
the occurrence of a Triggering Event, or (iii) an Adverse Change of Control,
this Agreement shall not be supplemented or amended to lengthen (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or,
the benefits to, the holders of Rights (other than an Acquiring Person or any
Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an officer of the Company or, so long as any Person is an
Acquiring Person hereunder, the Continuing Directors that states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, but
subject to the next succeeding paragraph, no supplement or amendment shall be
made that changes the Redemption Price, accelerates the Final Expiration Date,
changes the Purchase Price, or changes the number of Common Shares for which a
Right is exercisable without the approval of a majority of the Continuing
Directors then in office. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Shares.
-50-
<PAGE>
Notwithstanding anything contained in this Agreement to the contrary,
in the event that at any time after the date of this Agreement the Company
authorizes one or more series of preferred stock, then this Agreement may be
amended or supplemented as the Board of Directors shall deem necessary or
advisable (upon approval of the Continuing Directors then in office), without
the approval of any holders of Right Certificates, to provide for the issuance
of shares (or fractional shares) of preferred stock of the Company in place of
Common Shares which may be received upon exercise of Rights hereunder prior to
the occurrence of any Triggering Event, and to modify or amend this Agreement in
any respect to take into account the use of such preferred stock (or fractional
shares of preferred stock) in place of such Common Shares.
SECTION 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. Determinations and Actions by the Board of Directors.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company (with, where specifically provided for
herein, the concurrence of the Continuing Directors) shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board (with, where specifically provided for
herein, the Continuing Directors) or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made
-51-
<PAGE>
by the Board of Directors of the Company (with, where specifically provided for
herein, the concurrence of the Continuing Directors) in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights.
SECTION 30. 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
registered holders of the Common Shares).
SECTION 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language of this Agreement would adversely affect the purpose or effect
of this Agreement, the right of redemption set forth in Section 23 hereof shall
be reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
SECTION 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed in
-52-
<PAGE>
accordance with the laws of such Commonwealth applicable to contracts to be made
and performed entirely within such Commonwealth.
SECTION 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
-53-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
CROWN CORK & SEAL COMPANY,
INC.
Attest: By: /s/ Craig R.L. Calle
-----------------------------------
Name: Craig R.L. Calle
Title: Senior Vice President -
Finance and Treasurer
By: /s/ Richard L. Krzyzanowski
---------------------------
Executive Vice President,
General Counsel and
Secretary
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
Attest: By: /s/ Joanne Gorostiola
-----------------------------------
Name: Joanne Gorostiola
Title: Assistant Vice President
By: /s/ Ralph Persico
---------------------------
Customer Service Officer
-54-
<PAGE>
Exhibit A
[Form of Right Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER AUGUST 10, 2005 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
AN ASSOCIATE OF AN ACQUIRING PERSON. THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Right Certificate
Crown Cork & Seal Company, Inc.
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 August 7, 1995 (the "Rights Agreement"), between Crown
Cork & Seal Company, Inc., a Pennsylvania corporation (the "Company"), and First
Chicago Trust Company of New York (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. (Philadelphia, Pennsylvania time) on
August 10, 2005 at the office of the Rights Agent designated for such purpose,
or at the office of its successors as Rights Agent, one share of common stock,
par value $5.00 per share (the "Common Shares"), of the Company, fully paid and
nonassessable (or in certain circumstances, cash, property or other securities
of the Company), at a purchase price of $200 per Common Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed.
_______________
* The portion of the legend shall be modified to apply to an Acquiring Person
as applicable, and shall replace the preceding sentence.
<PAGE>
The number of Rights evidenced by this Right Certificate (and the
number of Common Shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of August 10, 1995 based on the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of Common Shares or other securities that 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, including Triggering Events (as
such term is defined in the Rights Agreement).
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 Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may, but are not required to, be redeemed by the
Company at a redemption price of $.01 per Right, payable in cash, Common Shares
or any other form of consideration deemed appropriate by the Company's Board of
Directors.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company that 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
A-2
<PAGE>
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
Crown Cork & Seal Company, Inc.
By:____________________________
Attest:
By:__________________________________
Countersigned:
First Chicago Trust Company of New York
By: _________________________________
A-3
<PAGE>
[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 Certificates)
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:_______________, ____
_______________________________
Signature
Signature Guaranteed: __________________________
Signatures must be guaranteed by a member firm of a registered United
States 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.
A-4
<PAGE>
________________________________________________________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: ________________________, ____
___________________________________________
Signature
Signature Guaranteed: ____________________________________________
Signatures must be guaranteed by a member firm of a registered United
States 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.
_________________________________________________________________________
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-5
<PAGE>
_______________________________________________________________________________
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To: Crown Cork & Seal Company, Inc.
The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Right Certificate to
purchase the Common Shares issuable upon the exercise of such Rights (or such
other securities of the Company or of any other person which may be issuable
upon exercise of the Rights) and requests that certificates for such securities
be issued in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
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 print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
Dated: ______________________, ____
______________________________
Signature
Signature Guaranteed: ___________________________
Signatures must be guaranteed by a member firm of a registered United
States 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.
A-6
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person.
Dated:_____________________, ____
______________________________
Signature
Signature Guaranteed: __________________________
Signatures must be guaranteed by a member firm of a registered United
States 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.
________________________________________________________________________________
NOTICE
The signatures in the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
_______________________________________________________________________________
________________________________________________________________________________
WARNING
In the event the Certificate set forth above in the Assignment and
Election to Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate of such Acquiring Person (as defined in the
Rights Agreement), and such Assignment or Election to Purchase will not be
honored.
A-7
<PAGE>
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
The Board of Directors of Crown Cork & Seal Company, Inc. (the
"Company") has declared a dividend distribution of one common stock purchase
right (the "Rights") for each outstanding share of common stock, par value $5.00
per share (the "Common Shares"), of the Company, to shareholders of record at
the close of business on August 10, 1995 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one Common Share (or
in certain circumstances, cash, property or other securities of the Company) at
a purchase price of $200, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and First Chicago Trust Company of New
York, the Rights Agent. Capitalized terms used but not otherwise defined herein
shall have the meaning given such terms in the Rights Agreement.
Initially, the Rights will be evidenced by the certificates
representing Common Shares then outstanding, no separate Right Certificates will
be distributed and the Rights will not be tradeable separate from the Common
Shares. The Rights will become exercisable and will separate from the Common
Shares upon the earlier of (i) ten calendar days after a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the outstanding
Common Shares (the "Shares Acquisition Date") or (ii) ten business days (or a
later date as determined by the Board of Directors or, if there has been an
Adverse Change of Control, by a majority of the Continuing Directors (as such
terms are herein defined)) after the commencement of, or first public
announcement of an intention to commence, a tender offer or exchange offer that
would result in a person or group beneficially owning 15% or more of the
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date").
As previously announced, on May 22, 1995, Crown and Compagnie Generale
d'Industrie et de Participations ("CGIP"), a major shareholder of
CarnaudMetalbox ("CMB"), executed an Exchange Offer Agreement pursuant to which
Crown has agreed, subject to certain terms and conditions, to commence an
exchange offer for the shares of CMB. The Rights Agreement contains provisions
which carve CGIP and its Affiliates and Associates out of the definition of
"Acquiring Person" as a result of CGIP's participation in the CMB exchange offer
and in certain other limited circumstances.
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Share certificates and will be transferred with and only with such Common
Share certificates, (ii) new Common Share certificates issued after the Record
Date will contain in accordance with the Rights Agreement a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.
<PAGE>
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on August 10, 2005, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date, and thereafter, the separate Right
Certificates alone will represent the Rights. Except as otherwise provided by
the Rights Agreement or determined by the Board of Directors, only Common Shares
issued prior to the Distribution Date will be issued with Rights.
In the event that a person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Common Shares
(or in certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the Purchase Price of the Right.
Notwithstanding the foregoing, following the occurrence of such an event or any
other Triggering Event (as defined below), all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
After the Shares Acquisition Date, in the event that (i) the Company
consolidates, or merges with, any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding Common Shares of
the Company are exchanged for securities, cash or property of the other person
and the Company is the surviving corporation, or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Purchase Price of the Right. The events set forth in
this paragraph and the preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable, and the number of Common Shares or other
securities, cash or property issuable, upon exercise of the Rights are subject
to customary adjustments from time to time to prevent dilution in the event of
certain changes in the shares of the Company. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
amount to an increase or decrease of at least 1% in the Purchase Price. The
Company may determine not to issue fractional Rights or shares, and in lieu
thereof, an adjustment in cash will be made based on the market value of the
Rights or shares on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (subject to adjustment), at any time before
the close of business on the tenth calendar day following the Shares Acquisition
Date; provided, however, that if the authorization to redeem the Rights occurs
on or after the date of a change in a majority of the Board of Directors of the
Company as a result of a proxy or consent solicitation and a person
B-2
<PAGE>
who was a participant in such solicitation has stated that such person (or any
of its Affiliates or Associates) has taken or intends to take or may consider
taking actions that would result in such person becoming an Acquiring Person or
cause the occurrence of a Triggering Event (the existence of these circumstances
being an "Adverse Change of Control"), then the redemption of the Rights will
require the approval of a majority of the Continuing Directors. Immediately
upon the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the redemption price.
"Continuing Director" means (i) any member of the Board of Directors
of the Company, while such person is a member of the Board, who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
was a member of the Board prior to the Record Date, or (ii) any person who
subsequently becomes a member of the Board who, while such person is a member of
the Board, is not an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by any person of 50% or more of the outstanding Common Shares,
the Board of Directors of the Company may exchange the then outstanding and
exercisable Rights (other than Rights owned by an Acquiring Person, which will
have become null and void), in whole or in part, for Common Shares, each Right
being exchangeable for one Common Share, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the earliest of (i) the Distribution
Date, (ii) a Triggering Event or (iii) an Adverse Change of Control. After the
first to occur of such events, the provisions of the Rights Agreement may be
amended with the approval of a majority of the Continuing Directors in order (x)
to make changes that do not adversely affect the interests of holders of the
Rights (other than the interests of any Acquiring Person), (y) to cure any
ambiguity or correct or supplement any provision which may be defective or
inconsistent with other provisions contained in the Rights Agreement, or (z) to
shorten or lengthen any time period under the Rights Agreement, but after (i)
the Distribution Date, (ii) a Triggering Event or (iii) an Adverse Change of
Control, no time period relating to redemption of the Rights may be lengthened
so as to make the Rights redeemable at a time at which the Rights had not then
been redeemable and no other time period may be lengthened unless for the
purpose of protecting, enhancing or clarifying the rights or benefits of holders
of the Rights.
B-3
<PAGE>
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
Accordingly, the existence of the Rights may deter certain acquirors from making
takeover proposals or tender offers. However, the rights plan helps ensure that
the Company's shareholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The adoption of the plan is not in response
to any specific takeover threat or proposal, but is a precaution taken to
protect the rights of the Company's shareholders.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. Once
the Rights are issued, a copy of the Rights Agreement will be available to
registered holders of the Rights upon written request free of charge from the
Rights Agent. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
B-4
