SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CUMMINS ENGINE COMPANY, INC.
(Exact Name of Registrant as specified in its Charter)
Indiana 35-0257090
(State of Incorporation or Organization) (I.R.S. Employer
Identification) No.)
500 Jackson Street
Box 3005
Columbus, Indiana 47202-3005
(Address of Principal Executive Office) (Zip Code)
If this Form relates to the If this Form relates to the
registration of a class of debt registration of a class of
securities and is effective upon debt securities and is to
filing pursuant to General become effective
Instruction A(c)(1) please check simultaneously with the
the following box: [ ] effectiveness of a
concurrent registration
statement under the
Securities Act of 1933
pursuant to General
Instruction A(c)(2) please
check the following box:
[ ]
Securities to be Registered Pursuant to Section 12(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
Pacific Stock Exchange
Securities to be Registered Pursuant to Section 12(g) of the Act:
None
(Title of Class)
This Amendment No. 8 on Form 8-A/A dated as of July 9, 1996, is hereby
filed to supplement and amend the information set forth in the Registration
Statement on Form 8-A dated January 8, 1987, filed by Cummins Engine
Company, Inc. and the information set forth in the amendments thereto on
Form 8-K dated July 13, 1990 and on Form 8-A dated December 22, 1988,
August 24, 1989, November 7, 1990, November 1, 1993 and January 12, 1994
respectively. All capitalized terms not defined herein have the meanings
ascribed to such terms in the Rights Agreement (as defined herein).
Item 1. Description of Registrant's Securities to be Registered.
On July 9, 1996, the Board of Directors of Cummins Engine Company,
Inc., an Indiana corporation (the "Company"), approved Amendment No. 8 to
that certain Rights Agreement dated as of September 9, 1986 (the
"Amendment"), between the Company and First National Bank of Chicago, a
national banking association, as Rights Agent (the "Rights Agent") (as
amended, the "Rights Agreement").
The Amendment, among other things, (a) extends the Expiration Date of
the Rights from September 30, 1996, to September 30, 2006, and (b) makes
changes to reflect that Tenneco Inc., a Delaware corporation, and its
affiliates no longer have an interest in the Company.
Item 2. Exhibits.
5. (a) Amendment No. 8 to the Rights Agreement dated as of July 9,
1996.
(b) Rights Agreement, as amended and restated.
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 hereunto duly
authorized.
Cummins Engine Company, Inc.
Date: July 15, 1996 By: /s/ Mark R. Gerstle
________________________
Mark R. Gerstle
Vice President - General
Counsel and Secretary
EXHIBIT 5 (a)
AMENDMENT #8 dated as of July 9, 1996, to the
RIGHTS AGREEMENT dated as of September 9, 1986, between
CUMMINS ENGINE COMPANY, INC., an Indiana corporation
(the "Company"), and THE FIRST NATIONAL BANK OF CHICAGO,
a national banking association, as Rights Agent (the
"Rights Agent").
WHEREAS, the Company and the Rights Agent entered into that
certain Rights Agreement dated as of September 9, 1986 (as amended, the
"Rights Agreement"); and
WHEREAS, the Company and the Rights Agent amended the Rights
Agreement on December 13, 1988 (Amendment No. 1), April 4, 1989
(Amendment No. 2), August 8, 1989 (Amendment No. 3), July 13, 1990
(Amendment No. 4), October 9, 1990 (Amendment No. 5), October 12, 1993
(Amendment No. 6), and December 29, 1993 (Amendment No. 7); and
WHEREAS, the Company and the Rights Agent deem it desirable
to further amend the Rights Agreement as set forth herein.
NOW THEREFORE, in consideration of the mutual promises and
covenants contained herein and in the Rights Agreement, the parties
hereto agree to the following changes:
1. Clause (iv) of Section 1(a) is deleted and clause (v) of
Section 1(a) is renumbered as clause (iv).
2. The proviso at the end of Section 1(b) is deleted, so
that Section 1(b) shall read, in its entirety, as follows:
"(b) "Affiliate" and "Associate", when used with reference to
any Person, shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on the date hereof."
3. The last paragraph of Section 1(c) is deleted.
4. Section 1(q) is revised to read, in its entirety, as
follows:
"(q) "Expiration Date" shall mean the Close of Business on
September 30, 2006."
5. Clause (y) of Section 1(hh) is deleted and clauses (w)
and (x) are renumbered as clauses (x) and (y), respectively, of
Section 1(hh).
6. Section 11(d)(i) is revised to read, in its entirety, as
such Section 11(d)(i) read prior to Amendment No. 7 to the Rights
Agreement, except that the last paragraph of such Section 11(d)(i) is
revised to read, in its entirety, as follows:
"Notwithstanding any provision of this Rights Agreement, a
Triggering Event shall not be deemed to have occurred solely as a
result of (i) Ford or Kubota becoming the Beneficial Owner of
Common Shares as permitted pursuant to (x) in the case of Ford,
Section 3.2(a), Section 3.2(e) or Section 3.2(f) of the Ford
Investment Agreement, or (y) in the case of Kubota,
Section 3.2(a), Section 3.2(d) or Section 3.2(e) of the Kubota
Investment Agreement or (ii) Ford becoming the Beneficial Owner of
Common Shares as permitted by the Option Agreement."
7. Except as expressly amended hereby, the Rights Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 8 to the Rights 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.
CUMMINS ENGINE COMPANY, INC.,
By: /s/ James A. Henderson
______________________
James A. Henderson
Chairman of the Board and
Chief Executive Officer
[Seal]
Attest:
/s/ Mark R. Gerstle
___________________
Mark R. Gerstle
THE FIRST NATIONAL BANK OF CHICAGO,
as Rights Agent,
By: /s/ Michael R. Phalen
_____________________
Michael R. Phalen
Vice President
[Seal]
Attest:
/s/ R. Wiencek
______________
R. Wiencek
EXHIBIT 5 (b)
RIGHTS AGREEMENT dated as of September 9, 1986, amended and
restated as of July 9, 1996, between CUMMINS ENGINE COMPANY, INC.,
between CUMMINS ENGINE COMPANY, INC., an Indiana corporation (the
"Company"), and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association, as Rights Agent (the "Rights Agent").
WHEREAS, the Company and the Rights Agent entered into that
certain Rights Agreement dated as of September 9, 1986 (as amended, the
"Rights Agreement"); and
WHEREAS, the Company and the Rights Agent amended the Rights
Agreement on December 13, 1988 (Amendment No. 1), April 4, 1989
(Amendment No. 2), August 8, 1989 (Amendment No. 3), July 13, 1990
(Amendment No. 4), October 9, 1990 (Amendment No. 5), October 12, 1993
(Amendment No. 6), December 29, 1993 (Amendment No. 7) and
July 9, 1996 (Amendment No. 8).
NOW THEREFORE, the Rights Agreement is restated to reflect
such amendments as follows:
The Board of Directors of the Company (the "Board") has
authorized and declared a dividend of one Right (as hereinafter
defined) for each share of Common Stock, par value $2.50 per share, of
the Company (the "Common Stock") outstanding on September 19, 1986 (the
"Record Date"), and has authorized the issuance of one Right (subject
to adjustment from time to time as provided in Section 11) with respect
to each share of Common Stock that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption
Date or the Expiration Date (as such terms are hereinafter defined);
provided, however, that Rights may be issued with respect to shares of
Common Stock that shall become outstanding after the Distribution Date
and prior to the earlier of the Redemption Date or the Expiration Date
in accordance with the provisions of Section 23. Each Right shall
initially represent the right to purchase one share of Common Stock.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Rights
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 after
the acquisition by such Person (or by such Person's Affiliates or
Associates) on or after July 16, 1990 of Beneficial Ownership of Common
Shares be the Beneficial Owner of 15% or more of the Common Shares then
outstanding (the number of Common Shares then outstanding being the
number set forth in the then most recently available filing by the
Company pursuant to the Exchange Act) but shall not include (i) the
Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any of its Subsidiaries or any Person holding Common
Shares for or pursuant to the terms of any such employee benefit plan;
(ii) any Person who becomes a Beneficial Owner of 15% or more of the
Common Shares then outstanding and who, within five Business Days of
the public announcement by the Company or such Person that such Person
has acquired such Beneficial Ownership, divests itself of a sufficient
number of Common Shares so that it is no longer the Beneficial Owner of
15% or more of the then outstanding Common Shares; (iii) Ford Motor
Company, a Delaware corporation ("Ford"), provided that Ford does not
acquire Beneficial Ownership of Common Shares except as permitted
pursuant to Section 3.2(a)(i), Section 3.2(e) or Section 3.2(f) of the
Investment Agreement between the Company and Ford dated as of July 16,
1990 (the "Ford Investment Agreement"), or pursuant to the Option
Agreement (as defined in such Investment Agreement); or (iv) Kubota
Corporation, a Japanese corporation ("Kubota"), provided that Kubota
does not acquire Beneficial Ownership of Common Shares except as
permitted pursuant to Section 3.2(a)(i), Section 3.2(d) or
Section 3.2(e) of the Investment Agreement between the Company and
Kubota dated as of July 16, 1990 (the "Kubota Investment Agreement").
(b) "Affiliate" and "Associate", when used with reference to
any Person, shall have the respective meanings ascribed to such terms
in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, rights
(other than rights issuable under this Rights Agreement), warrants
or options, or otherwise; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by
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 thereunder; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy 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 under the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of
such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in clause (B) of subparagraph (ii) of
this paragraph (c)) or disposing of any securities of the Company.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Book Value" when used with reference to Common Shares
issued by any Person shall mean the amount of equity of such Person
applicable to each Common Share, determined (i) in accordance with
generally accepted accounting principles in effect on the date as of
which such Book Value is to be determined, (ii) using all the
consolidated assets and all the consolidated liabilities of such Person
on the date as of which such Book Value is to be determined, except
that no value shall be included in such assets for goodwill arising
from consummation of a Business Combination, and (iii) after giving
effect to (A) the exercise of all rights, options and warrants to
purchase such Common Shares (other than the Rights) and the conversion
of all securities convertible into such Common Shares, at an exercise
or conversion price, per Common Share, which is less than such Book
Value before giving effect to such exercise or conversion, (B) all
dividends and other distributions on the capital stock of such Person
declared prior to the date as of which such Book Value is to be
determined and to be paid or made after such date and (C) any other
agreement, arrangement, understanding, transaction or other action
prior to the date as of which such Book Value is to be determined which
would have the effect of thereafter reducing such Book Value.
(f) "Business Combination" shall have the meaning set forth
in Section 13(a).
(g) "Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in the Borough of Manhattan, The City of New York, are
authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date shall mean
5:00 p.m., New York City time, on such date; provided, however, that if
such date is not a Business Day, "Close of Business" shall mean
5:00 p.m., New York City time, on the next succeeding Business Day.
(i) "Common Shares" when used with reference to the Company
prior to a Business Combination shall mean the shares of Common Stock
or any other shares of capital stock of the Company into which the
Common Stock shall be reclassified or changed. "Common Shares" when
used with reference to any Person (other than the Company prior to a
Business Combination) shall mean shares of capital stock of such Person
(if such Person is a corporation) of any class or series, or units of
equity interests in such Person (if such Person is not a corporation)
of any class or series, the terms of which do not limit (as a fixed
amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount
of assets distributable on such class or series upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person and
do not provide that such class or series is subject to redemption at
the option of such Person, or any shares of capital stock or units of
equity interests into which the foregoing shall be reclassified or
changed; provided, however, that if at any time there shall be more
than one such class or series of capital stock of or equity interests
in such Person, "Common Shares" of such Person shall include all such
classes and series substantially in the proportion of the total number
of shares or other units of each such class or series outstanding at
such time.
(j) "Common Stock" shall mean the Common Stock, par value
$2.50 per share, of the Company.
(k) "Company" shall mean Cummins Engine Company, Inc., an
Indiana corporation; provided, however, that if there is a Business
Combination, "Company" shall have the meaning set forth in
Section 13(b).
(l) The term "control", with respect to any Person shall
mean the power to direct the management and policies of such Person,
directly or indirectly, by or through stock ownership, agency or
otherwise, or pursuant to or in connection with an agreement,
arrangement or understanding (written or oral) with one or more other
Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to
the foregoing.
(m) "Disinterested Director" shall mean any member of the
Board (i) who is not an officer or employee of the Company or any of
its Subsidiaries, (ii) who is not an Acquiring Person or an Affiliate
or Associate of an Acquiring Person or a nominee or representative of
an Acquiring Person or of any such Affiliate or Associate and (iii) who
was a member of the Board prior to the Share Acquisition Date or was
recommended for election or elected by a majority of the Disinterested
Directors then on the Board.
(n) "Distribution Date" shall mean the Close of Business on
the tenth Business Day after the earlier of (i) the Share Acquisition
Date or (ii) the Tender Offer Date.
(o) "Equivalent Shares" shall mean any class or series of
capital stock of the Company, other than Common Shares, which is
entitled to participate in dividends and other distributions, including
distributions upon the liquidation, dissolution or winding up of the
Company on a proportional basis with the Common Shares. In calculating
the number of any class or series of Equivalent Shares for purposes of
Section 11, the number of shares, or fractions of a share, of such
class or series of capital stock that is entitled to the same dividend
or distribution as a whole Common Share shall be deemed to be one
share.
(p) "Exchange Act" shall mean the Securities Exchange Act of
1934, as in effect on the date in question, unless otherwise
specifically provided in this Rights Agreement.
(q) "Expiration Date" shall mean the Close of Business on
September 30, 2006.
(r) "Major Part" when used with reference to the assets of
the Company and its Subsidiaries as of any date shall mean assets (i)
having a fair market value aggregating 50% or more of the total fair
market value of all the assets of the Company and its Subsidiaries
(taken as a whole) as of the date in question, (ii) accounting for 50%
or more of the total value (net of depreciation and amortization) of
all the assets of the Company and its Subsidiaries (taken as a whole)
as would be shown on a consolidated or combined balance sheet of the
Company and its Subsidiaries as of the date in question, prepared in
accordance with generally accepted accounting principles then in
effect, or (iii) accounting for 50% or more of the total amount of net
income of the Company and its Subsidiaries (taken as a whole) as would
be shown on a consolidated or combined statement of income of the
Company and its Subsidiaries for the period of 12 months ending on the
last day of the month next preceding the date in question, prepared in
accordance with generally accepted accounting principles then in
effect.
(s) "Market Value" when used with reference to the Common
Shares on any date shall be deemed to be the average of the daily
closing prices, per Common Share, for the 30 consecutive Trading Days
immediately prior to the date in question; provided, however, that in
the event that the Market Value of such Common Shares is to be
determined in whole or in part during a period following the
announcement by the issuer of such Common Shares of any dividend,
distribution or other action of the type described in Section 11(a),
(b) or (c) which would require an adjustment thereunder, then in each
such case the Market Value of such Common Shares shall be appropriately
adjusted to reflect the effect of such action on the market price of
such Common Shares. The closing price for each Trading Day shall be
the last sale price, regular way, or, in case no such sale takes place
on such Trading 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 which such Common Shares
are listed or admitted to trading on a national securities exchange or,
if such Common Shares are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-
the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such
other system then in use, or, if on any such Trading Day such Common
Shares are not quoted by any such system, the average of the closing
bid and asked prices as furnished by a professional market maker making
a market in such Common Shares selected by a majority of the
Disinterested Directors or, if there are no Disinterested Directors, by
the Board. If on any such Trading Day no such market maker is making a
market in such Common Shares, the closing price of such Common Shares
on such Trading Day shall mean the fair value of such Common Shares as
determined in good faith by a majority of the Disinterested Directors
or, if there are no Disinterested Directors, by the Board (whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent, the holders of Rights
and all other Persons). For purposes of this paragraph (s), the term
Common Shares shall include Equivalent Shares.
(t) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(u) "Principal Party" shall mean the Surviving Person in a
Business Combination; provided, however, that if such Surviving Person
is a direct or indirect Subsidiary of any other Person, "Principal
Party" shall mean the Person which is the ultimate parent of such
Surviving Person and which is not itself a Subsidiary of another
Person. In the event ultimate control of such Surviving Person is
shared by two or more Persons, "Principal Party" shall mean that Person
that is immediately controlled by such two or more Persons.
(v) "Purchase Price" with respect to each whole Right shall
mean $200 and shall be payable in lawful money of the United States of
America.
(w) "Record Date" shall mean September 19, 1986.
(x) "Redemption Date" shall mean the Close of Business on
the date as of which the Rights are ordered to be redeemed by the Board
as provided in Section 24(a).
(y) "Redemption Price" shall mean $0.01 per whole Right.
(z) "Registered Common Shares" shall mean Common Shares
which are, as of the date of consummation of a Business Combination,
and have been continuously registered under Section 12 of the Exchange
Act during the preceding 12 months.
(aa) "Right Certificate" shall mean a certificate evidencing
a Right in substantially the form attached hereto as Exhibit A.
(bb) "Rights" shall mean the rights to purchase Common
Shares as provided in this Rights Agreement.
(cc) "Securities Act" shall mean the Securities Act of 1933
as in effect on the date in question, unless otherwise specifically
provided in this Rights Agreement.
(dd) "Share Acquisition Date" shall mean the first date of
public disclosure by the Company or an Acquiring Person that a Person
has become an Acquiring Person.
(ee) "Subsidiary" shall mean a Person, a majority of the
total outstanding Voting Power of which is owned, directly or
indirectly, by another Person or by one or more other Subsidiaries of
such other Person or by such other Person and one or more other
Subsidiaries of such other Person.
(ff) "Summary of Rights" shall mean the Summary of Rights To
Purchase Common Stock of Cummins Engine Company, Inc., in substantially
the form attached hereto as Exhibit B.
(gg) "Surviving Person" shall mean (1) the Person which is
the continuing or surviving Person in a consolidation or merger
specified in Section 13(a)(i) or (ii) or (2) the Person to which the
Major Part of the assets of the Company and its Subsidiaries are sold,
leased, exchanged or otherwise transferred or disposed of in a
transaction specified in Section 13(a)(iii); provided, however, that if
the Major Part of the assets of the Company and its Subsidiaries are
sold, leased, exchanged or otherwise transferred or disposed of in one
or more related transactions specified in Section 13(a)(iii) to more
than one Person, the "Surviving Person" in such case shall mean the
Person that acquired assets of the Company and/or its Subsidiaries with
the greatest fair market value in such transaction or transactions.
(hh) "Tender Offer Date" shall mean the first date of the
commencement of, or first public disclosure of the intent of any Person
(other than (x) the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any of its Subsidiaries or
any Person holding Common Shares for or pursuant to the terms of any
such employee benefit plan, (y) Ford in connection with its making of
an offer in accordance with Section 3.2(a)(i) or Section 3.2(f) of the
Ford Investment Agreement, or (z) Kubota in connection with its making
of an offer in accordance with the final provision of Section 3.2(a)(i)
of Section 3.2(e) of the Kubota Investment Agreement) to commence a
tender or exchange offer for 20% or more of the outstanding Common
Shares (including any such date which is after the date of this Rights
Agreement and prior to the issuance of the Rights).
(ii) "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Shares, Equivalent
Shares or Rights, as the case may be, are listed or admitted to trading
is open for the transaction of business or, if the Shares or Rights in
question are not listed or admitted to trading on any national
securities exchange, a Business Day.
(jj) "Triggering Event" shall have the meaning set forth in
Section 11(d)(i).
(kk) "Voting Power" when used with reference to the capital
stock of, or units of equity interests in, any Person shall mean the
power under ordinary circumstances (and not merely upon the happening
of a contingency) to vote in the election of directors of such Person
(if such Person is a corporation) or to participate in the management
and control of such Person (if such Person is not a corporation).
SECTION 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who prior to the Distribution Date shall 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 one or more
co-Rights Agents as it may deem necessary or desirable (the term
"Rights Agent" being used herein to refer, collectively, to the Rights
Agent together with any such co-Rights Agents. 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
Distribution Date, (i) the Rights will be evidenced by the certificates
for Common Shares registered in the names of the holders thereof (which
certificates for Common Shares shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (ii) the
right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable
after the Company has notified the Rights Agent of the occurrence of
the Distribution Date, the Rights Agent will send, by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the
Distribution Date, at the address of such holder shown on the records
of the Company, a Right Certificate, evidencing one Right (as adjusted
from time to time prior to the Distribution Date as provided in
Section 11) for each Common Share so held. After the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of the Summary of Rights, in substantially
the form attached hereto as Exhibit B, by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Close of
Business on the Record Date at the address of such holder shown on the
records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date the
Rights associated with the Common Shares represented by such
certificates shall be evidenced by such certificates with or without a
copy of the Summary of Rights attached thereto and the registered
holders of the Common Shares shall also be the registered holders of
the associated Rights. Until the earliest of the Distribution Date,
the Redemption Date or the Expiration Date, the transfer of any of the
certificates for the Common Shares outstanding on the Record Date, even
without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
(c) Certificates for Common Shares issued after the Record
Date, but prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, shall have printed on, written
on or otherwise affixed to them a legend substantially in the following
form:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
dated as of September 9, 1986 (the "Rights Agreement"),
between Cummins Engine Company, Inc., and The First National
Bank of Chicago, as Rights Agent, the terms of which are
hereby incorporated herein by reference and a copy of which
is on file at the principal executive office of Cummins
Engine Company, Inc. 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. Cummins Engine Company, Inc., will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances, Rights beneficially owned by
Acquiring Persons or their Affiliates or Associates (as such
terms are defined in the Rights Agreement) may become null
and void and any holder of any such Right (including any
subsequent holder) shall not have any right to exercise such
Rights.
With respect to certificates bearing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such
certificates alone, and the transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
SECTION 4. Form of Right Certificates. (a) The Right
Certificates (and the form of election to purchase and form of
assignment to be printed on the reverse side thereof) shall be in
substantially the form attached hereto as Exhibit A and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Rights Agreement, or
as may be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed,
or to conform to usage. Subject to the provisions of Sections 11, 13
and 23, the Right Certificates, when first issued, shall be dated as of
the Distribution Date, and on their face shall entitle the holders
thereof to purchase such number of Common Shares as shall be set forth
therein at the Purchase Price set forth therein.
(b) Notwithstanding any other provision of this Rights
Agreement, (i) any Right Certificate issued pursuant to Section 3(a)
that represents Rights known by the Company to be beneficially owned by
an Acquiring Person or any Affiliate or Associate of an Acquiring
Person, (ii) any Right Certificate issued at any time upon the transfer
of any Right to an Acquiring Person or Person known by the Company to
be an Affiliate or Associate of an Acquiring Person or to any Person
known by the Company to be a nominee of such Acquiring Person,
Affiliate or Associate and (iii) any Right Certificate issued pursuant
to Section 6, 11 or 23 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence,
shall contain a legend substantially in the following form:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person. Accordingly,
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.
SECTION 5. Execution, Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company
by the Chairman of the Board, the President, any Executive Vice
President or the Vice President--General Counsel of the Company, either
manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the
Secretary or any Assistant Secretary 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 or obligatory
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 of the Company.
(b) After the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal corporate trust office in
Chicago, Illinois, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the
number of Rights evidenced by each of the Right Certificates and the
date 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 15, at any
time after the Distribution Date, and at or prior to the earlier of the
Redemption Date or the 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 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 at the principal corporate trust office of the Rights
Agent. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as
the case may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(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 for all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make a new Right Certificate
of like tenor and deliver such new Right Certificate to the Rights
Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Expiration Date of Rights.
(a) Each whole Right shall entitle the registered holder thereof, upon
the exercise thereof as provided herein, to purchase, for the Purchase
Price, at any time after the earlier of the Distribution Date or the
occurrence of a Triggering Event (but not during such time as there is
a right of redemption as provided in Section 24(a)), and at or prior to
the earlier of (i) the Expiration Date or (ii) the Redemption Date, one
Common Share, subject to adjustment from time to time as provided in
Sections 11 and 13.
(b) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date by
surrendering the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent
at its principal corporate trust office in Chicago, Illinois, together
with payment of the Purchase Price for each whole Right exercised, at
or prior to the earlier of (i) the Expiration Date or (ii) the
Redemption Date.
(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 Common
Shares to be purchased together with an amount equal to any applicable
transfer tax, in lawful money of the United States of America, in cash
or by certified check or bank draft payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) requisition from
any transfer agent of the Common Shares (or make available, if the
Rights Agent is the transfer agent) certificates for the number of
Common Shares to be purchased (the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests),
(ii) requisition from the Company the amount of cash to be paid in lieu
of issuing fractional shares in accordance with Section 15, (iii) cause
the certificate for such Common Shares to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) deliver
such cash to or upon the order of such holder.
(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 equal in number 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 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are or were, at any time after the earlier of
the Distribution Date or the occurrence of a Triggering Event,
beneficially owned by an Acquiring Person or any Affiliate or Associate
of an Acquiring Person shall become null and void upon the occurrence
of a Triggering Event, and any holder of any such Right (including any
subsequent holder) shall not have any right to exercise any such Right
under this Rights Agreement after the occurrence of a Triggering Event.
(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 the registered holder of a
Right Certificate upon the occurrence of any purported exercise as set
forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates of such Beneficial Owner
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 canceled form or, if surrendered to
the Rights Agent, shall be canceled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by 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 Right Certificate purchased or acquired by the Company.
The Rights Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company, destroy such
canceled 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) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates
for such Common Shares (subject to payment of the Purchase Price), be
duly and validly authorized, issued, fully paid and nonassessable
shares.
(b) So long as the Common Shares are listed on any national
securities exchange, the Company covenants and agrees to use its best
efforts to cause, from and after such time as the Rights become
exercisable, all Common Shares reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such exercise.
(c) The Company further covenants and agrees that it will
pay when due and payable any and all Federal and state transfer taxes
and charges which may be payable in respect of the issuance or delivery
of Right Certificates or of Common Shares upon the exercise of the
Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or in respect of
the issuance or delivery of certificates for Common Shares in a name
other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, nor shall the Company be
required to transfer or deliver any Right Certificate or issue or
deliver any certificates for Common Shares upon the exercise of any
Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the satisfaction of the
Company that no such tax is due.
SECTION 10. Common Shares Record Date. Each Person in whose
name any certificate for Common Shares is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of
record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Common Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on
which the Common Shares transfer books of the Company are open.
SECTION 11. Adjustment of Number and Kind of Shares and
Rights Outstanding. The number and kind of shares covered by each
Right and, prior to the Distribution Date, the number of Rights
associated with each Common Share 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 Rights Agreement and prior to the Distribution Date
(x) declare a dividend, or make a distribution, on its outstanding
Common Shares payable in Common Shares, (y) subdivide (by a stock split
or otherwise) or split the outstanding Common Shares into a larger
number of Common Shares or (z) combine (by a reverse stock split or
otherwise) the outstanding Common Shares into a smaller number of
Common Shares then, in each such event, (1) each Right shall thereafter
evidence the right to purchase, for the Purchase Price, that number of
Common Shares obtained by multiplying the number of Common Shares
issuable upon the exercise of a Right immediately prior to such event
by a fraction, the numerator of which shall be the number of Common
Shares outstanding immediately after such event and the denominator of
which shall be the number of Common Shares outstanding immediately
prior to such event and (2) the number of Rights associated with each
Common Share of the Company at the time of the record date for such
dividend or distribution or the effective date of such subdivision or
combination shall be adjusted so that the number of Rights thereafter
associated with each such Common Share shall equal the result obtained
by multiplying the number of Rights associated with each such Common
Share immediately prior to such record date or effective date by a
fraction, the numerator of which shall be the total number of such
Common Shares outstanding immediately prior to such record date or
effective date and the denominator of which shall be the total number
of such Common Shares outstanding immediately following such record
date or effective date.
(ii) In the event the Company shall at any time after the
date of this Rights Agreement and prior to the Distribution Date issue
any shares of its capital stock in a reclassification or change of the
outstanding Common Shares (including any such reclassification or
change in connection with a merger in which the Company is the
surviving corporation), the number and kind of securities issuable upon
the exercise of the Rights and the number of Rights associated with
each security issued in such reclassification or change shall be
appropriately adjusted to reflect such reclassification or change.
(iii) In the event the Company shall at any time after the
Distribution Date authorize the occurrence of any of the events
described in clause (x), (y) or (z) of Section 11(a)(i) or in
Section 11(a)(ii), then, in each such event, the number and kind of
securities issuable upon the exercise of the Rights shall be adjusted
so that the holder of any Right exercised after such time shall be
entitled to receive, for the Purchase Price, the aggregate number and
kind of securities which such holder would have received on any such
event if such holder had exercised such Right immediately prior to the
occurrence of such event.
(b) If the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common Shares or of
any class or series of Equivalent Shares entitling such holders (for a
period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Shares or Equivalent Shares (or
securities convertible into Common Shares or Equivalent Shares) at a
price per share (or having a conversion price per share, if a security
convertible into Common Shares or Equivalent Shares) less than the
Market Value of one Common Share or Equivalent Share on such record
date, each Right shall thereafter evidence the right to purchase, for
the Purchase Price, that number of Common Shares obtained by
multiplying the number of Common Shares covered by a Right immediately
prior to the record date by a fraction the numerator of which shall be
the number of Common Shares and Equivalent Shares (if any) outstanding
on such record date plus the number of additional Common Shares or
Equivalent Shares, as the case may be, to be offered for subscription
or purchase (or into which the convertible securities so to be offered
are initially convertible) and the denominator of which shall be such
outstanding number of Common Shares and Equivalent Shares (if any) plus
the number of Common Shares or Equivalent Shares, as the case may be,
which the aggregate offering price of the total number of Common Shares
or Equivalent Shares, as the case may be, so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such Market Value. In case such
subscription price may be paid in a consideration, part or all of which
shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by a majority of the Disinterested
Directors or, if there are no Disinterested Directors, by the Board,
whose determination shall be described in a statement filed with the
Rights Agent. Common Shares and Equivalent Shares owned by or held for
the account of the Company or any Subsidiary of the Company shall not
be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights, options or warrants are not
so issued, each Right shall be adjusted to evidence the right to
receive that number of Common Shares which such Right would have
entitled the holder to receive, for the Purchase Price, if such record
date had not been fixed.
(c) If the Company shall fix a record date for the making of
a distribution to all holders of the Common Shares or of any class or
series of Equivalent Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of cash (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of
the last regular cash dividend theretofore paid on the Common Shares),
evidences of indebtedness, assets, securities (other than Common
Shares) or subscription rights, options or warrants (excluding those
referred to in Section 11(b)), each Right shall thereafter evidence the
right to purchase, for the Purchase Price, that number of Common Shares
obtained by multiplying the number of Common Shares covered by a Right
immediately prior to the record date by a fraction the numerator of
which shall be the Market Value of one Common Share or Equivalent Share
on such record date and the denominator of which shall be such Market
Value, less the fair market value (as determined in good faith by a
majority of the Disinterested Directors or, if there are no
Disinterested Directors, by the Board, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of
the cash, evidences of indebtedness, assets or securities so to be
distributed or of such subscription rights, options or warrants
applicable to one Common Share or Equivalent Share, as the case may be.
Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, each
Right shall be adjusted to evidence the right to receive that number of
Common Shares which such Right would have entitled the holder to
receive, for the Purchase Price, if such record date had not been
fixed.
(d)(i) If any of the events described in the following
clauses (A), (B), (C) or (D) of this Section 11(d)(i) (each such event
being herein referred to as a "Triggering Event") shall occur:
(A) any Acquiring Person or any Affiliate or Associate of
any Acquiring Person shall, directly or indirectly (1) merge into
the Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation in such merger or
combination and the Common Shares of the Company shall remain
outstanding and unchanged, (2) transfer any assets to the Company
or any of its Subsidiaries in exchange (in whole or in part) for
shares of capital stock of the Company or any such Subsidiary or
for securities exercisable for or convertible into shares of
capital stock of the Company or any such Subsidiary or otherwise
obtain from the Company or any such Subsidiary, with or without
consideration, any additional shares of capital stock of the
Company or any such Subsidiary or securities exercisable for or
convertible into shares of capital stock of the Company or any
such Subsidiary (other than as part of a pro rata distribution or
offer to all holders of Common Shares or an issuance upon
conversion of convertible securities of the Company or any such
Subsidiary that were not acquired from the Company or any such
Subsidiary), (3) sell, lease, exchange, mortgage, pledge or
otherwise transfer to or with, or purchase or otherwise acquire
from, the Company or any of its Subsidiaries, assets on terms and
conditions less favorable to the Company than the Company would be
able to obtain in an arm's-length negotiation with an unaffiliated
third party, (4) engage in any transaction with the Company or any
of its Subsidiaries involving the sale, purchase, lease, exchange,
mortgage, pledge or transfer (in one transaction or series of
transactions), other than in the ordinary course of business of
one of the lines of business currently engaged in as of the date
hereof by the Company, such Subsidiaries and such Acquiring Person
or Associate or Affiliate, of assets having an aggregate fair
market value of more than $25,000,000.00, (5) receive any
compensation from the Company or any of its Subsidiaries other
than compensation for full-time employment as a regular employee
at rates in accordance with past practices of the company or such
Subsidiaries or (6) receive the benefit (except proportionately as
a stockholder) of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries;
(B) during such time as there is an Acquiring Person, there
shall be (1) any reclassification of securities of the Company,
including any reverse stock split, (2) any recapitalization of the
Company, (3) any merger or consolidation of the Company with any
of its Subsidiaries or (4) any other transaction or series of
transactions (whether or not with or into or otherwise involving
an Acquiring Person), which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share
of the outstanding shares of any class of equity securities or of
securities exercisable for or convertible into securities of the
Company or any of its Subsidiaries which is directly or indirectly
owned by an Acquiring Person or any Associate or Affiliate of any
Acquiring Person;
(C) Any Person shall become an Acquiring Person;
(D) during such time as there is an Acquiring Person, (1)
there shall be any reduction in the annual rate of dividends paid
on the Common Shares (except as necessary for valid business
reasons or to reflect any subdivision of the Common Shares or as
required under the laws of the jurisdiction of incorporation of
the Company) or (2) there shall be a failure to increase the
annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding Common Shares
(except as necessary for valid business reasons or except to the
extent such increase in the rate of dividends would be prohibited
under the laws of the jurisdiction of incorporation of the
Company);
then in each such case proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e) and below, shall
thereafter have a right to receive, upon exercise thereof for the
Purchase Price in accordance with terms of this Rights Agreement, such
number of Common Shares as shall equal the result obtained by
multiplying the Purchase Price by a fraction, the numerator of which is
the number of Common Shares for which a Right is then exercisable and
the denominator of which is 50% of the Market Value of one Common Share
on the date of the occurrence of such Triggering Event.
Notwithstanding any provision of this Rights Agreement, a
Triggering Event shall not be deemed to have occurred solely as a
result of (i) Ford or Kubota becoming the Beneficial Owner of Common
Shares as permitted pursuant to (x) in the case of Ford,
Section 3.2(a), Section 3.2(e) or Section 3.2(f) of the Ford Investment
Agreement, or (y) in the case of Kubota, Section 3.2(a), Section 3.2(d)
or Section 3.2(e) of the Kubota Investment Agreement or (ii) Ford
becoming the Beneficial Owner of Common Shares as permitted by the
Option Agreement.
(ii) If an event occurs which would require an adjustment
under both Section 11(d)(i) and Section 11(a), (b) or (c), the
adjustment provided for in Section 11(a), (b) or (c) shall be in
addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(d)(i); provided, however, that if a single event
occurs that represents both a Triggering Event and a Business
Combination, the Rights exercisable upon such event shall be
exercisable only in a manner set forth in Section 13(a) and an
adjustment shall be made pursuant to any paragraph of this Section 11.
(iii) In the event the Company shall not have sufficient
authorized and unissued Common Shares or authorized and issued Common
Shares held in its treasury to permit the exercise in full of the
Rights in accordance with this Section 11(d), the Company shall take
all such action as may be necessary to authorize additional Common
Shares for issuance upon exercise of the Rights; provided, however,
that if the Company is unable to cause the authorization of additional
Common Shares within 60 days after the occurrence of a Triggering
Event, then the Company, to the extent necessary and permitted by
applicable law and any agreement or instruments in effect prior to the
Distribution Date to which it is a party, shall upon due exercise of a
Right and payment of the Purchase Price for each Common Share as to
which such Right is exercised, distribute a combination of Common
Shares, cash and/or other equity and/or debt securities (such
combination being determined by a majority of the Disinterested
Directors by the end of such 60-day period) having an aggregate value
equal to the market price of the Common Shares which otherwise would
have been issued pursuant to Section 11(d)(i), which value shall be
determined by a nationally recognized investment banking firm selected
by a majority of the Disinterested Directors. To the extent that any
legal or contractual restrictions (pursuant to agreements or
instruments in effect prior to the earlier of the Distribution Date or
the occurrence of a Triggering Event to which it is a party) prevent
the Company from paying the full amount payable in accordance with the
foregoing sentence, the Company shall pay to holders of the Rights as
to which such payments are being made all amounts which are not then
restricted on a pro rata basis and shall thereafter continue to make
payments on a pro rata basis as such payments become permissible under
such legal or contractual restrictions until such payments have been
paid in full.
(e) All calculations under this Section 11 shall be made to
the nearest ten-thousandth of a share.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised shall
become entitled to receive any securities of the Company other than
Common Shares, thereafter the number of such other securities so
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares
contained in Section 11(a), (b), (c) and (d), and the provisions of
Sections 7, 9, 10 and 13 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 number of Common Shares or other
securities relating to a Right shall evidence the right to purchase,
for the Purchase Price, the adjusted number of shares or other
securities purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Irrespective of any adjustment or change in the number
of Common Shares or the number or kind of other securities issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms which were
expressed in the initial Right Certificates issued hereunder.
(i) In any case in which this Section 11 shall require that
an adjustment be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such
event issuing to the holder of any Right exercised after such record
date the Common Shares and/or other securities of the Company, if any,
issuable upon such exercise over and above the securities issuable
before giving effect 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
securities upon the occurrence of the event requiring such adjustment.
SECTION 12. Certificate of Adjustment. Whenever an
adjustment is made as provided in Section 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 a Right Certificate. The Rights
Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
SECTION 13. Consolidation, Merger or Sale or Transfer of
Major Part of Assets. (a) In the event that, after the Distribution
Date, any transaction specified in the following clauses (i), (ii) and
(iii) (each such transaction being herein referred to as a "Business
Combination") shall directly or indirectly be consummated:
(i) the Company shall consolidate with, or merge with or
into, any other Person;
(ii) any Person shall merge with or into the Company and the
Company shall be the surviving corporation in such merger and in
connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for capital stock or other
securities of the Company or of any other Person or cash or any
other property; or
(iii) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall
sell, lease, exchange or otherwise transfer or dispose of), in one
or more transactions, the Major Part of the assets of the Company
and its Subsidiaries (taken as a whole) to any other Person or
Persons;
then, in each such case proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e), shall thereafter
have the right to receive, upon the exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, the
securities specified below:
(A) If the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights
Agreement, such number of Registered Common Shares of such
Principal Party, free and clear of liens, encumbrances or other
adverse claims, as shall be equal to the result obtained by
multiplying the Purchase Price by a fraction, the numerator of
which shall be the number of Common Shares for which a Right was
exercisable immediately prior to consummation of such Business
Combination and the denominator of which shall be 50% of the
Market Value of one Registered Common Share of such Principal
Party on the date of such Business Combination.
(B) If the Principal Party in such Business Combination does
not have Registered Common Shares outstanding, any Right shall
thereafter represent the right to receive, upon the exercise
thereof for the Purchase Price in accordance with the terms of
this Rights Agreement, at the election of the holder of such Right
at the time of the exercise thereof, one of the following:
(1) such number of Common Shares of the Surviving Person
in such Business Combination as shall be equal to the result
obtained by multiplying the Purchase Price by a fraction, the
numerator of which shall be the number of Common Shares for
which a Right was exercisable immediately prior to the
consummation of such Business Combination and the denominator
of which shall be 50% of the Book Value of each Common Share
of such Surviving Person immediately after giving effect to
such Business Combination;
(2) such number of Common Shares of the Principal Party
in such Business Combination (if the Principal Party is not
also the Surviving Person in such Business Combination) as
shall be equal to the result obtained by multiplying the
Purchase Price by a fraction, the numerator of which shall be
the number of Common Shares for which a Right was exercisable
immediately prior to the consummation of such Business
Combination and the denominator of which shall be 50% of the
Book Value of each Common Share of the Principal Party
immediately after giving effect to such Business Combination;
or
(3) if the Principal Party in such Business Combination
is an Affiliate of one or more Persons which has Registered
Common Shares outstanding, such number of Registered Common
Shares of whichever of such Affiliates of the Principal Party
has Registered Common Shares with the greatest aggregate
Market Value on the date of consummation of such Business
Combination as shall be equal to the result obtained by
multiplying the Purchase Price by a fraction, the numerator
of which shall be the number of Common Shares for which a
Right was exercisable immediately prior to the consummation
of such Business Combination and the denominator of which
shall be 50% of the Market Value of each Registered Common
Share of such Affiliate on the date of such Business
Combination.
All Common Shares of any Person for which any Right may be exercised
after consummation of a Business Combination as provided in this
Section 13(a) shall, when issued upon exercise thereof in accordance
with this Rights Agreement, be validly issued, fully paid and
nonassessable and free of preemptive rights, rights of first refusal or
any other restrictions or limitations on the transfer or ownership
thereof.
(b) After consummation of any Business Combination (i) each
issuer of Common Shares for which Rights may be exercised as set forth
in Section 13(a) shall be liable for, and shall assume, by virtue of
such Business Combination, all the obligations and duties of the
Company pursuant to this Rights Agreement, (ii) the term "Company"
shall thereafter be deemed to refer to each such issuer, (iii) each
such issuer shall take such steps in connection with such consummation
as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation
to its Common shares thereafter deliverable upon the exercise of the
Rights and (iv) the number of Common Shares of each such issuer
thereafter receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Shares contained in Sections 11 and 13, and the provisions of
Sections 7, 9, 10, 11 and 13 with respect to the Common Shares shall
apply on like terms to the Common Shares of such issuer.
(c) The Company shall not consummate any Business
Combination unless each issuer for which Rights may be exercised as set
forth in Section 13(a) shall have sufficient authorized Common Shares
that 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 each such issuer shall have:
(i) executed and delivered to the Rights Agent a supplemental
agreement providing for the obligation of such issuer to issue
Common Shares upon the exercise of Rights in accordance with the
terms set forth in Sections 13(a) and (b) and further providing
that, as soon as practicable after the date of such Business
Combination, such issuer, at its own expense, will:
(A) 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, will use its best efforts to cause such registration
statement to become effective as soon as practicable after
such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act)
until the Expiration Date;
(B) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may
be necessary or appropriate; and
(C) use its best efforts to list the Rights and the
securities purchasable upon exercise of the Rights on a
national securities exchange;
(ii) furnished to the Rights Agent an opinion of independent
counsel stating that such supplemental agreement is a valid,
binding and enforceable agreement of such issuer; and
(iii) filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting
forth the number of Common Shares of such issuer which may be
purchased upon the exercise of each Right after the consummation
of such Business Combination.
(d) In the event a Business Combination shall be consummated
at any time after the occurrence of a Triggering Event, the Rights that
have not been exercised prior to such time shall thereafter become
exercisable in the manner set forth in Section 13(a).
SECTION 14. Additional Covenants. (a) Notwithstanding any
other provision of this Rights Agreement, no adjustment to the number
of Common Shares (or fractions of a share) or other securities for
which a Right is exercisable or the number of Rights outstanding or
associated with each Common Share or any similar or other adjustment
shall be made or be effective if such adjustment would have the effect
of reducing or limiting the benefits the holders of the Rights would
have had absent such adjustment, including, without limitation, the
benefits under Sections 11(d) and 13, unless the terms of this Rights
Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that it shall not
effect any Business Combination if at the time of, or immediately after
such Business Combination, there are any rights, options, warrants or
other instruments outstanding which would diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(c) Without limiting the generality of Section 13, in the
event the nature of the organization of any Person shall preclude or
limit the acquisition of Common Shares of such Person upon exercise of
the Rights as required by Section 13(a) as a result of a Business
Combination, it shall be a condition to such Business Combination that
such Person shall take such steps (including, but not limited to, a
reorganization) as may be necessary to assure that the benefits
intended to be derived under Section 13 upon the exercise of the Rights
are assured to the holders thereof.
SECTION 15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractional Rights or
Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company may pay 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 15(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 Trading 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 which Rights are listed or admitted to trading
on a national securities exchange or, if on such Trading Day the Rights
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use or, if on any such
Trading Day the Rights are not quoted by any such system, the average
of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by a majority of
the Disinterested Directors or, if there are no Disinterested
Directors, by the Board. If on any such Trading Day no such market
maker is making a market in the Rights, the current market value of a
whole Right shall be determined in good faith by a majority of the
Disinterested Directors or, if there are no Disinterested Directors, by
the Board.
(b) The Company shall not be required to issue fractional
Common Shares upon exercise of the Rights or certificates which
evidence fractional Common Shares. In lieu of fractional Common
Shares, the Company may elect to (i) issue scrip or warrants in
registered form (either represented by a certificate or uncertificated)
or in bearer form (represented by a certificate) which shall entitle
the holder to receive a full share upon the surrender of such scrip or
warrants aggregating a full share or (ii) pay to the registered holders
of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one Common Share. For purposes of this Section 15(b),
the current market value of one Common Share shall be the closing price
of a Common Share (as determined pursuant to the second and third
sentences of Section 1(s)) 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 securities upon exercise of a Right.
SECTION 16. Rights of Action. (a) All rights of action in
respect of this Rights Agreement 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 Rights 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 Rights Agreement and shall be
entitled to specific performance of the obligations of any Person
under, and injunctive relief against actual or threatened violations of
the obligations of any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to
enforce the provisions of this Rights Agreement shall be entitled to
recover the reasonable costs and expenses, including attorneys' fees,
incurred in such action.
SECTION 17. Transfer and Ownership of Rights and Right
Certificates. (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 will
be transferable only on the registry books of the Rights Agent when
surrendered at the principal corporate trust office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of transfer.
(c) 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 certificate for Common Shares made
by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
SECTION 18. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed, for any purpose, the
holder of Common Shares or other securities which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the
rights of a stockholder of the Company, including, without limitation,
any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, to give or withhold
consent to any corporate action, to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25), to
receive dividends or other distributions 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 19. 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
Rights 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
Rights Agreement, including the costs and expenses of defending against
any claim of liability arising therefrom, directly or indirectly.
(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 Rights 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.
SECTION 20. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Rights 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 22. In case at the time such successor Rights
Agent shall succeed to the agency created by this Rights 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 Rights
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 Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights 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:
(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
Rights Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identity of
any Acquiring Person) 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 Executive Vice President, the Treasurer or the Secretary
of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Rights
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights
Agreement or in the Right Certificates (except as to its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made
by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Rights 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 Rights Agreement or in any Right Certificate; nor
shall it be responsible for any adjustment required under the
provisions of Section 11 or 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 adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual
notice of such adjustment); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or
reservation of any Common Shares or other securities for which a Right
is exercisable to be issued pursuant to this Rights Agreement or any
Right Certificate or as to whether any Common Shares or other
securities for which a Right is exercisable will, when so issued, be
validly authorized, 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 Rights 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, the
Executive Vice President, any Vice President, the Treasurer or the
Secretary 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 stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not the Rights Agent under this Rights
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(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.
SECTION 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Rights Agreement upon 30 days' notice in writing mailed to
the Company and to each transfer agent of the Common Shares by
registered or certified mail and to the holders of the 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 registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of
the United States, the State of Illinois, or the State of New York (or
of any other state of the United States so long as such corporation is
authorized to conduct a corporate trust business in either the State of
New York or the State of Illinois), in good standing, having a
principal office in either the State of New York or the State of
Illinois, which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by Federal or
state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder and execute
and deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares
and mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this
Section 22, 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 23. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights 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
the Board to reflect any adjustment or change made in accordance with
the provisions of this Rights Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the earlier of the Redemption Date or
the Expiration Date, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right
Certificate would be issued and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
SECTION 24. Redemption and Termination. (a) The Board may,
at any time prior to the earliest of (i) the Distribution Date,
(ii) the occurrence of a Triggering Event and (iii) the Expiration
Date, order the redemption of all, but not less than all, the then
outstanding Rights at the Redemption Price. In addition, for a period
of 10 Business Days following the occurrence of the Triggering Event
set forth in Clause (C) of Section 11(d)(i) involving the acquisition
by an Acquiring Person of Beneficial Ownership of not more than 50% of
the then outstanding Common Shares, the Board, with the approval of the
majority of the Disinterested Directors, may order the redemption of
all, but not less than all, the then outstanding Rights at the
Redemption Price; provided that simultaneously with such redemption
there are issued to the holders of Rights (other than Rights which
shall have become null and void pursuant to Section 7(e) of this Rights
Agreement) new Rights which are immediately exercisable and which are
identical to the Rights issued pursuant to this Rights Agreement except
that such new Rights shall provide that each holder shall have a right
to receive, upon exercise thereof and the payment of $1, one Common
Share, such number of Common Shares being subject to the adjustments
set forth in Section 11 (other than the adjustments set forth in
paragraph (d) thereof).
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, and without any further action and without
any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 calendar days after the action of the
Board 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. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. The
notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder of Rights
receives such notice. In any case, failure to give such notice by
mail, or any defect in the notice, to any particular holder of Rights
shall not affect the sufficiency of the notice to other holders of
Rights.
SECTION 25. Notice of Certain Events. (a) In case the
Company shall propose (i) to take any action of the type described in
Section 11(a), (b) or (c) that would require an adjustment thereunder,
(ii) to effect any Business Combination or (iii) to effect the
liquidation, dissolution or winding up of the Company, then, in such
case, the Company shall give notice of such proposed action to each
holder of a Right Certificate, which notice shall specify any record
date for the purposes of determining any participation therein by the
holders of the Common Shares or the date on which such action is to
take place and the date of any participation therein by the holders of
the Common Shares, if any such date is to be fixed, and such notice
shall be so given at least 20 calendar days prior to any such record
date, the taking of such action or the date of participation therein by
the holders of the Common Shares, whichever shall be the earliest.
(b) In case a Triggering Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give
notice of the occurrence of such Triggering Event to each holder of a
Right Certificate, which notice shall specify the Triggering Event and
the consequences of such Triggering Event to holders of Rights under
Section 11(d).
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 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:
Cummins Engine Company, Inc.
Box 3005
Columbus, Indiana 47202-3005
Attention: Secretary
Subject to the provisions of Section 22, any notice or demand
authorized by this Rights Agreement to be given or made by the Company
or 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 National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Shareholder Services Department
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to any holder of a Right
Certificate shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer agent for
the Common Shares.
SECTION 27. Supplements and Amendments. At any time prior
to the earlier of the Distribution Date or the occurrence of a
Triggering Event, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of this Rights
Agreement without the approval of any holder of the Rights (including,
without limitation, the time when the Distribution Date shall occur);
provided that, on and after the Tender Offer Date, this Rights
Agreement may be supplemented or amended only by a majority of the
Disinterested Directors then in office. After the earlier of the
Distribution Date or the occurrence of a Triggering Event, and subject
to applicable law, the Company may, and the Rights Agent shall if the
Company so directs, amend this Rights Agreement without the approval of
any holders of Right Certificates (i) to cure any ambiguity or to
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision of this Rights
Agreement or (ii) to make any other provisions in regard to matters or
questions arising hereunder which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). No supplement or
amendment to this Rights Agreement shall be made which changes the
Purchase Price or the Redemption Price or provides for an earlier
Expiration Date. Upon the delivery of a certificate from an
appropriate officer of the Company which states that a proposed
supplement or amendment to this Rights Agreement is in compliance with
the provisions of this Section 27, the Rights Agent shall execute such
supplement or amendment.
SECTION 28. Successors. All the covenants and provisions of
this Rights 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. Benefits of This Rights Agreement;
Determinations and Actions by the Board, etc. (a) Nothing in this
Rights 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 (prior to the Distribution Date, the
registered holders of the Common Shares) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement
shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (prior to
the Distribution Date, the registered holders of the Common Shares).
(b) Any action required under this Rights Agreement to be
approved by a majority of the Disinterested Directors shall also be
required to be approved by a majority of the Board. The Board (except
where approval of the Disinterested Directors is specifically provided
for herein) shall have the exclusive power and authority to administer
this Rights Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (i) interpret the
provision of this Rights Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Rights
Agreement (including a determination to redeem or not redeem the Rights
or to amend this Rights Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause
(y) below, all omissions with respect to the foregoing) which are done
or made by the Board (subject, where specifically provided for herein,
to the approval of the Disinterested 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 Disinterested Directors to any liability to the holders of
the Rights. In making any determinations under this Rights Agreement,
the Board may consider and weigh as it deems appropriate the interests
of shareholders, employees, suppliers and customers of the Company,
communities in which the Company does business, and any other factors
the Board considers pertinent.
SECTION 30. Severability. If any term, provision, covenant
or restriction of this Rights 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 Rights Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
SECTION 31. Governing Law. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Indiana and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State.
SECTION 32. Descriptive Headings. Descriptive headings of
the several Sections of this Rights Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Rights 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.
CUMMINS ENGINE COMPANY, INC.,
By: /s/ James A. Henderson
______________________
James A. Henderson
Chairman of the Board and
Chief Executive Officer
[Seal]
Attest:
/s/ Mark R. Gerstle
___________________
Mark R. Gerstle
THE FIRST NATIONAL BANK OF CHICAGO,
as Rights Agent,
By: /s/ Michael R. Phalen
_____________________
Michael R. Phalen
Vice President
[Seal]
Attest:
/s/ R. Wiencek
______________
R. Wiencek
