<PAGE>
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RIGHTS AGREEMENT
CURTISS-WRIGHT CORPORATION
and
ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent
Dated as of November 6, 2000
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TABLE OF CONTENTS
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Section 1. Certain Definitions.........................................................................1
Section 2. Appointment of Rights Agent.................................................................5
Section 3. Issue of Right Certificates.................................................................5
Section 4. Form of Right Certificates..................................................................7
Section 5. Countersignature and Registration...........................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates................................................8
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights...............................9
Section 8. Cancellation and Destruction of Right Certificates.........................................11
Section 9. Availability of Shares of Preferred Stock..................................................11
Section 10. Preferred Stock Record Date................................................................13
Section 11. Adjustment of Purchase Price, Number of Shares and Number of Rights........................13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.................................22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earnings Power......................22
Section 14. Fractional Rights and Fractional Shares....................................................26
Section 15. Rights of Action...........................................................................27
Section 16. Agreement of Right Holders.................................................................28
Section 17. Right Certificate Holder Not Deemed a Stockholder..........................................28
Section 18. Concerning the Rights Agent................................................................29
Section 19. Merger or Consolidation or Change of Name of Rights Agent..................................29
Section 20. Duties of Rights Agent.....................................................................30
Section 21. Change of Rights Agent.....................................................................33
Section 22. Issuance of New Right Certificates.........................................................33
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Section 23. Redemption..................................................34
Section 24. Exchange....................................................34
Section 25. Notice of Certain Events....................................36
Section 26. Notices.....................................................37
Section 27. Supplements and Amendments..................................37
Section 28. Successors..................................................38
Section 29. Benefits of this Agreement..................................38
Section 30. Severability................................................38
Section 31. Governing Law...............................................38
Section 32. Counterparts................................................38
Section 33. Descriptive Headings........................................39
Section 34. Administration..............................................39
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RIGHTS AGREEMENT
Agreement, dated as of November 6, 2000, between
Curtiss-Wright Corporation, a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for each
share of Common Stock (as hereinafter defined) of the Company outstanding as of
the close of business (as defined below) on November 21, 2000 (the "Record
Date"), each Right representing the right to purchase one one-thousandth
(subject to adjustment) of a share of Preferred Stock (as hereinafter defined),
upon the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right (subject to adjustment as
provided herein) 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 and the Final 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 Redemption Date and the Final Expiration Date in accordance with Section
22.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which shall be the
Beneficial Owner (as such term is hereinafter defined) of 15%
or more of the shares of Common Stock then outstanding, but
shall not include an Exempt Person (as such term is
hereinafter defined); provided, however, that (i) if the Board
of Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person" has become
such inadvertently (including, without limitation, because (A)
such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such
Person to be a "Acquiring Person" or (B) such Person was aware
of the extent of its Beneficial Ownership of Common Stock but
had no actual knowledge of the consequences of such Beneficial
Ownership under this Rights Agreement) and without any
intention of changing or influencing control of the Company,
and such Person, as promptly as practicable divested or
divests himself or itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such
Person would no longer be an Acquiring Person, then such
Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement; (ii)
Unitrin, Inc., a Delaware corporation ("Unitrin") and its
subsidiaries shall not be deemed to be or to become an
Acquiring Person as long as such entities in the aggregate
beneficially own a number of shares of Common Stock not in
excess of the sum of (A) 4,382,400 shares of Common Stock and
(B) a number of shares of Common Stock representing, in the
aggregate 1% of the shares of Common Stock
<PAGE>
2
then outstanding; and (iii) if, as of the date hereof or prior
to the first public announcement of the adoption of this
Agreement, any Person (other than Unitrin and its
subsidiaries) is or becomes the Beneficial Owner of 15% or
more of the shares of Common Stock outstanding, such Person
shall not be deemed to be or to become an "Acquiring Person"
unless and until such time as such Person shall, after the
first public announcement of the adoption of this Agreement,
become the Beneficial Owner of additional shares of Common
Stock representing 1% or more of the outstanding shares of
Common Stock as of the date of the first public announcement
of the adoption of this Agreement (other than pursuant to a
dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision
of the outstanding Common Stock), unless, upon becoming the
Beneficial Owner of such additional shares of Common Stock,
such Person is not then the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding. Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of shares of Common Stock by the
Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the shares of Common
Stock then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding by reason of such share
acquisitions by the Company and thereafter become the
Beneficial Owner of any additional shares of Common Stock,
then such Person shall be deemed to be an "Acquiring Person"
unless upon the consummation of the acquisition of such
additional shares of Common Stock such Person does not own 15%
or more of the shares of Common Stock then outstanding. The
phrase "then outstanding", when used with reference to a
Person's Beneficial Ownership of securities of the Company,
shall mean the number of such securities then issued and
outstanding together with the number of such securities not
then actually issued and outstanding which such Person would
be deemed to own beneficially hereunder.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
shall be deemed to have "Beneficial Ownership" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to beneficially own,
directly or indirectly within the meaning of Rule 13d-3
of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement;
<PAGE>
3
(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 (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public
offering of securities), written or otherwise, or upon
the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially
own, (x) securities tendered pursuant to a tender or
exchange offer made pursuant to, and in accordance
with, the applicable rules and regulations promulgated
under the Exchange Act by or on behalf of such Person
or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase, (y)
securities which such Person has a right to acquire on
the exercise of Rights at any time prior to the time a
Person becomes an Acquiring Person or (z) securities
issuable upon exercise of Rights from and after the
time a Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or
Section 22 hereof ("original Rights") or pursuant to
Section 11(i) or Section 11(n) with respect to an
adjustment to original Rights; 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 by reason of such
agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also
then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person and with respect to
which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with
respect to a bona fide public offering of securities)
for the purpose of acquiring, holding, voting (except
to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of such securities.
Notwithstanding the foregoing, no Person (and no Affiliate or Associate of any
such Person) shall be deemed to be the Beneficial Owner of or to beneficially
own particular securities if such Person is the Beneficial Owner of or
beneficially owns such securities solely as a result of its
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4
status as an Affiliate or Associate of Unitrin and if such Person would not
otherwise be the Beneficial Owner of or beneficially own such Securities.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking
institutions in the State of New York, or the State in
which the office of the Rights Agent is located, are
authorized or obligated by law or executive order to
close.
(e) "close of business" on any given date shall
mean 5:00 P.M., New York City time, on such date;
provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the
next succeeding Business Day.
(f) "Common Stock" when used with reference to the
Company shall mean the Common Stock, par value $1 per
share of the Company. "Common Stock" when used with
reference to any Person other than the Company shall
mean the capital stock (or, in the case of an
unincorporated entity, the equivalent equity interest)
with the greatest voting power of such other Person or,
if such other Person is a subsidiary of another Person,
the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Exempt Person" shall mean the Company, any
Subsidiary (as such term is hereinafter defined) of the
Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any entity or trustee
holding Common Stock for or pursuant to the terms of
any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees
of the Company or of any Subsidiary of the Company.
(i) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(j) "New York Stock Exchange" shall mean the New
York Stock Exchange, Inc.
(k) "Person" shall mean any individual, firm,
corporation, partnership, limited partnership, business
trust, limited liability company, unincorporated
association or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(l) "Preferred Stock" shall mean the Series A
Participating Preferred Stock, par value $1 per share,
of the Company having the rights and preferences
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5
upon adoption as and set forth in the Form of
Certificate of Designations attached to this Agreement
as Exhibit A.
(m) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.
(n) "Securities Act" shall mean the Securities Act
of 1933, as amended.
(o) "Stock Acquisition Date" shall mean the first
date of public announcement (which for purposes of this
definition, shall include, without limitation, a report
filed pursuant to Section 13(d) of the Exchange Act) by
the Company or an Acquiring Person that an Acquiring
Person has become such or such earlier date as a
majority of the Board of Directors shall become aware
of the existence of an Acquiring Person.
(p) "Subsidiary" of any Person shall mean any
corporation or other entity of which securities or
other ownership interests having ordinary voting power
sufficient to elect a majority of the board of
directors or other persons performing similar functions
are beneficially owned, directly or indirectly, by such
Person, and any corporation or other entity that is
otherwise controlled by such Person.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable.
The Rights Agent shall have no duty to supervise, and in no event
shall be liable for, the acts or omissions of any such co-Rights
Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the
Stock Acquisition Date or (ii) the tenth Business Day (or such
later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any
Person (other than an Exempt Person) of, or of the first
public announcement of the intention of such Person (other
than an Exempt Person) to commence, a tender or exchange offer
the consummation of which would result in any Person becoming
the Beneficial Owner of shares of Common Stock aggregating 15%
or more of the Common Stock then outstanding (including any
such date which is after the date of this Agreement and prior
to the issuance of the Rights; the earlier of such dates being
herein referred to as the "Distribution Date"); provided,
however, that if either of such dates occurs after the date of
this Agreement and on or prior to the Record Date, then the
Distribution Date shall be the Record Date, (x) the Rights
will be
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6
evidenced (subject to the provisions of Section 3(b)
hereof) by the certificates for Common Stock registered in the
names of the holders thereof, or by a current ownership
statement issued with respect to uncertificated shares of
Common Stock in lieu of such a certificate (an "Ownership
Statement") and not by separate Right Certificates and (y) the
Rights will be transferable only in connection with the
transfer of Common Stock. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign and the Company will send or
cause to be sent (and the Rights Agent will, if requested,
send) by first-class, insured, postage-prepaid mail, to each
record holder of Common Stock as of the close of business on
the Distribution Date (other than any Acquiring Person or any
Associate or Affiliate of an Acquiring Person), at the address
of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock
so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) (i) On the Record Date, or as soon as
practicable thereafter, the Company will send a copy of a
Summary of Rights to Purchase Shares of Preferred Stock, in
substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Stock as of the close of business on the
Record Date (other than any Acquiring Person or any Associate
or Affiliate of any Acquiring Person), at the address of such
holder shown on the records of the Company.
(ii) With respect to shares of Common Stock
represented by certificates for Common Stock or Ownership
Statements outstanding as of the Record Date, until the
earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date, the Rights associated with such shares
of Common Stock will be evidenced by such certificates or
Ownership Statements. Until the earlier of the Distribution
Date and the Expiration Date (as defined below), the surrender
for transfer of any certificate for shares of Common Stock
outstanding on the Record Date, or the transfer of any Common
Stock represented by an Ownership Statement outstanding on the
Record Date, in either case with or without a copy of the
Summary of Rights, shall also, except as otherwise provided
herein, constitute the transfer of the Rights associated with
the Common Stock represented thereby.
(c) (i) Certificates or Ownership Statements
issued for Common Stock (including, without limitation, upon
transfer of outstanding Common Stock, disposition of Common
Stock out of treasury stock or issuance or reissuance of
Common Stock out of authorized but unissued shares) after the
Record Date but prior to the earlier of the Distribution Date
and the Expiration Date (as defined below), shall have
impressed on, printed on, written on or otherwise affixed to
them the following legend:
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7
This [certificate] [statement] also evidences and
entitles the holder hereof to certain rights as set
forth in a Rights Agreement between Curtiss-Wright
Corporation and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, dated as of November 6,
2000, as the same may be amended from time to time
(the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices
of Curtiss-Wright Corporation. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
[certificate] [statement]. Curtiss-Wright Corporation
will mail to the holder of this [certificate]
[statement] a copy of the Rights Agreement without
charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the
Rights Agreement, Rights owned by or transferred to
any Person who becomes an Acquiring Person (as
defined in the Rights Agreement) and certain
transferees thereof will become null and void and
will no longer be transferable.
With respect to such certificates or Ownership Statements containing the
foregoing legend, until the Distribution Date, the Rights associated with the
Common Stock represented by such certificates or Ownership Statements shall be
evidenced by such certificates or Ownership Statements alone, and the surrender
for transfer of any such certificate or the transfer of any shares of Common
Stock represented by such Ownership Statements, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby.
(ii) In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but
prior to the Distribution Date, any Rights associated with
such Common Stock shall be deemed cancelled and retired so
that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which are no longer
outstanding.
Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Agreement or the rights
of any holder of the Rights.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares and
of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B hereto and
may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule
<PAGE>
8
or regulation made pursuant thereto or with any rule or
regulation of the New York Stock Exchange or of any other
stock exchange or automated quotation system 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 22
hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-thousandths of a
share of Preferred Stock as shall be set forth therein at the
price per one one-thousandth of a share of Preferred Stock set
forth therein (the "Purchase Price"), but the number of such
one one-thousandths of a share of Preferred Stock and the
Purchase Price shall be subject to adjustment as provided
herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf
of the Company by the Chairman of the Board of Directors, the
President, any of the Vice Presidents, the Treasurer or the
Comptroller of the Company, either manually or by facsimile
signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent, either manually or by
facsimile signature, and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates, or shall have
attested the Company's seal thereon, 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, or who attested the Company's seal thereon, had
not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company, and the
Company's seal may be attested, 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
Agreement any such Person was not such an officer.
(b) Following the Distribution Date, and the receipt by
the Rights Agent of all required information the Rights Agent
will keep or cause to be kept, at an office or agency
designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates.
(a) Subject to the provisions of Sections 7(e),
11(a)(ii) and 14 hereof, at any time after the close of
business on the Distribution Date, and prior to the
<PAGE>
9
close of business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of
one one-thousandths of a share of Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or agency of the Rights
Agent designated for such purpose. 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. The Rights Agent shall have
no duty or obligation under this Section 6 unless and until it
is satisfied that all such taxes and/or charges have been paid
in full.
(b) Subject to the provisions of Section 11(a)(ii)
hereof, at any time after the Distribution Date and prior to
the close of business on the earlier of the Redemption Date or
the Final Expiration Date, 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 satisfactory to them, and reimbursement
to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered
holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price;
Expiration Date of Rights.
(a) Except as otherwise provided herein, the Rights
shall become exercisable on the Distribution Date, and
thereafter the registered holder of any Right Certificate may,
subject to Section 11(a)(ii) hereof and except as otherwise
provided herein, exercise the Rights evidenced thereby in
whole or in part upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office or agency of
the Rights Agent designated for such purpose, together with
payment of the Purchase Price for each one one-thousandth of a
share of Preferred Stock as to which the Rights are exercised,
at any time which is both after the Distribution Date and
prior to the earliest (the "Expiration Date") of
(i) the close of business on November 6, 2010 (the "Final
Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof
(the "Redemption Date"),
<PAGE>
10
(iii) the time at which such Rights are exchanged as provided
in Section 24 hereof or (iv) the consummation of the merger
(the "Merger") pursuant to the Agreement and Plan of Merger,
dated as of November 6, 2000, by and among the Company,
Unitrin and CW Disposition Company, a Delaware corporation.
(b) The Purchase Price shall be initially $235 for each
one one-thousandth of a share of Preferred Stock purchasable
upon the exercise of a Right. The Purchase Price and the
number of one one-thousandths of a share of Preferred Stock or
other securities or property to be acquired upon exercise of a
Right shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance
with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt
of a Right Certificate representing exercisable Rights, with
the form of election to purchase duly executed, accompanied by
payment of the aggregate Purchase Price for the shares of
Preferred Stock to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof, in
cash or by certified check, cashier's check or money order
payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent
of the Preferred Stock or make available if the Rights Agent
is the transfer agent for the Preferred Stock certificates for
the number of shares of Preferred Stock to be purchased (and
the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests), or (B) requisition from the
depositary agent depositary receipts representing interests in
such number of one one-thousandths of a share of Preferred
Stock as are to be purchased (in which case certificates for
the Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent)
(and the Company hereby directs the depositary agent to comply
with such request), (ii) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof,
(iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less
than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the exercisable Rights
remaining unexercised shall be issued by the Rights Agent to
the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14
hereof.
<PAGE>
11
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported transfer
or exercise of Rights pursuant to Section 6 hereof or this
Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
assignment or election to purchase set forth on the reverse
side of the Right Certificate surrendered for such transfer or
exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner)
thereof as the Company or the Rights Agent shall reasonably
request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the Company, or shall, at the written request of
the Company, destroy, or cause to be destroyed, such cancelled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Availability of Shares of Preferred
Stock.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock or any shares of Preferred
Stock held in its treasury, the number of shares of Preferred
Stock that will be sufficient to permit the exercise in full
of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the time that a Person becomes an Acquiring Person,
shares of Common Stock and other securities) issuable upon the
exercise of Rights may be listed or admitted to trading on the
New York Stock Exchange or listed on any other national
securities exchange or quotation system, the Company shall use
its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such
issuance to be listed or admitted to trading on the New York
Stock Exchange or listed on any other exchange or quotation
system upon official notice of issuance upon such exercise.
(c) From and after such time as the Rights become
exercisable, the Company shall use its best efforts, if then
necessary to permit the issuance of shares of Preferred Stock
(and following the time that a Person first becomes an
<PAGE>
12
Acquiring Person, shares of Common Stock and other securities)
upon the exercise of Rights, to register and qualify such
shares of Preferred Stock (and following the time that a
Person first becomes an Acquiring Person, shares of Common
Stock and other securities) under the Securities Act and any
applicable state securities or "Blue Sky" laws (to the extent
exemptions therefrom are not available), cause such
registration statement and qualifications to become effective
as soon as possible after such filing and keep such
registration and qualifications effective until the earlier of
the date as of which the Rights are no longer exercisable for
such securities and the Final Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90
days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and
permit it to become effective. Upon any such suspension, the
Company shall promptly notify the Rights Agent thereof and
issue a public announcement (with prompt notice thereof to the
Rights Agent) stating that the exercisability of the Rights
has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained and until a registration
statement under the Securities Act (if required) shall have
been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares
of Preferred Stock (and, following the time that a Person
becomes an Acquiring Person, shares of Common Stock and other
securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates therefor (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any
shares of Preferred Stock (or shares of Common Stock or other
securities) upon the exercise of Rights. The Company shall
not, however, be required to pay any tax or charge which may
be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or
delivery of certificates or depositary receipts for the
Preferred Stock (or shares of Common Stock or other
securities) in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or deliver any certificates or
depositary receipts for Preferred Stock (or shares of Common
Stock or other securities) upon the exercise of any Rights
until any such tax or charge shall have been paid (any such
tax or charge being payable by that holder of such Right
Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no
such tax or charge is due.
<PAGE>
13
Section 10. Preferred Stock Record Date. Each
Person in whose name any certificate for Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock
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
taxes or charges) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be deemed
to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which
the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of
Preferred Stock for which the Rights shall be exercisable, including,
without limitation, the right to vote or to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number
of Shares and Number of Rights. The Purchase Price, the number of
shares of Preferred Stock or other securities or property purchasable
upon exercise of each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section
11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of Preferred
Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Stock transfer
books of the Company were open, the holder would have owned
upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right.
<PAGE>
14
(ii) Subject to Section 24 of this Agreement
and except as otherwise provided in this Section
11(a)(ii), in the event any Person becomes an
Acquiring Person, each holder of a Right shall
thereafter have the right to receive, upon exercise
thereof at a price equal to the then current Purchase
Price immediately prior to the Person becoming an
Acquiring Person multiplied by the number of one
one-thousandths of a share of Preferred Stock for
which a Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of shares of
Preferred Stock, such number of shares of Common
Stock (or at the option of the Company, such number
of one one-thousandths of shares of Preferred Stock)
as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for
which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share
market price of the Company's Common Stock
(determined pursuant to Section 11(d) hereof) on the
date of the occurrence of such event; provided,
however, that the Purchase Price and the number of
shares of Common Stock so receivable upon exercise of
a Right shall thereafter be subject to further
adjustment as appropriate in accordance with Section
11(f) hereof. Notwithstanding anything in this
Agreement to the contrary, however, from and after
the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that
are beneficially owned by (x) any Acquiring Person
(or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or
any such Affiliate or Associate) who becomes a
transferee after the invalidation time or (z) a
transferee of any Acquiring Person (or any such
Affiliate or Associate) who became a transferee prior
to or concurrently with the invalidation time
pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any
Person with whom it has any continuing agreement,
arrangement or understanding regarding the
transferred Rights or (II) a transfer which the Board
of Directors has determined is part of a plan,
arrangement or understanding which has the purpose or
effect of avoiding the provisions of this paragraph,
and subsequent transferees of such Persons, shall be
null and void without any further action and any
holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any
provision of this Agreement. The Company shall use
all reasonable efforts to ensure that the provisions
of this Section 11(a)(ii) are complied with, but
shall have no liability to any holder of Right
Certificates or other Person as a result of its
failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or
transferees hereunder. From and after the
invalidation time, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become null and
void pursuant to the provisions of this paragraph,
and any Right
<PAGE>
15
Certificate delivered to the Rights Agent that
represents Rights that are or have become null and
void pursuant to the provisions of this paragraph
shall be cancelled. From and after the occurrence of
an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exercised
pursuant to this Section 11(a)(ii) shall thereafter
be exercisable only in accordance with Section 13 and
not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option
substitute for a share of Common Stock issuable upon
the exercise of Rights in accordance with the
foregoing subparagraph (ii) such number or fractions
of shares of Preferred Stock having an aggregate
current market value equal to the current per share
market price of a share of Common Stock. In the event
that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii),
the Board of Directors shall, to the extent permitted
by applicable law and any material agreements then in
effect to which the Company is a party (A) determine
the excess of (1) the value of the shares of Common
Stock issuable upon the exercise of a Right in
accordance with the foregoing subparagraph (ii) (the
"Current Value") over (2) the then current Purchase
Price multiplied by the number of one one-thousandths
of shares of Preferred Stock for which a Right was
exercisable immediately prior to the time that the
Acquiring Person became such (such excess, the
"Spread"), and (B) with respect to each Right (other
than Rights which have become void pursuant to
Section 11(a)(ii)), make adequate provision to
substitute for the shares of Common Stock issuable in
accordance with subparagraph (ii) upon exercise of
the Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase
Price, (3) shares of Preferred Stock or other equity
securities of the Company (including, without
limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend
and liquidation rights substantially comparable to
those of the shares of Common Stock, are deemed in
good faith by the Board of Directors to have
substantially the same value as the shares of Common
Stock (such shares of Preferred Stock and shares or
fractions of shares of preferred stock are
hereinafter referred to as "Common Stock
equivalents")), (4) debt securities of the Company,
(5) other assets or (6) any combination of the
foregoing, having a value which, when added to the
value of the shares of Common Stock actually issued
upon exercise of such Right, shall have an aggregate
value equal to the Current Value (less the amount of
any reduction in the Purchase Price), where such
aggregate value has been determined by the Board of
Directors upon the advice of a nationally recognized
investment banking firm selected in good faith by the
Board of Directors; provided, however, if the Company
shall not make adequate provision to deliver value
pursuant to clause (B)
<PAGE>
16
above within thirty (30) days following the date that
the Acquiring Person became such (the "Section
11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, to the extent permitted by
applicable law and any material agreements then in
effect to which the Company is a party, upon the
surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of
Common Stock (to the extent available), and then, if
necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If, upon the
date any Person becomes an Acquiring Person, the
Board of Directors shall determine in good faith that
it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon
exercise in full of the Rights, then, if the Board of
Directors so elects, the thirty (30) day period set
forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of
such additional shares (such thirty (30) day period,
as it may be extended, is herein called the
"Substitution Period"). To the extent that the
Company determines that some action need be taken
pursuant to the second and/or third sentence of this
Section 11(a)(iii), the Company (x) shall provide,
subject to Section 11(a)(ii) hereof and the last
sentence of this Section 11(a)(iii) hereof, that such
action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution
Period in order to seek any authorization of
additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such
second sentence and to determine the value thereof.
In the event of any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such
time as the suspension is no longer in effect, in
each case with prompt notice thereof to the Rights
Agent. For purposes of this Section 11(a)(iii), the
value of the shares of Common Stock shall be the
current per share market price (as determined
pursuant to Section 11(d)(i)) on the Section
11(a)(ii) Trigger Date and the per share or
fractional value of any "Common Stock equivalent"
shall be deemed to equal the current per share market
price of the Common Stock. The Board of Directors of
the Company may, but shall not be required to,
establish procedures to allocate the right to receive
shares of Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this
Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Stock (or shares having the same rights,
privileges and
<PAGE>
17
preferences as the Preferred Stock ("equivalent preferred
shares")) or securities convertible into Preferred Stock or
equivalent preferred shares at a price per share of Preferred
Stock or equivalent preferred shares (or having a conversion
price per share, if a security convertible into shares of
Preferred Stock or equivalent preferred shares) less than the
then current per share market price of the Preferred Stock
(determined pursuant to Section 11(d) hereof) on such record
date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of
Preferred Stock and equivalent preferred shares outstanding on
such record date plus the number of shares of Preferred Stock
and equivalent preferred shares which the aggregate offering
price of the total number of shares of Preferred Stock and/or
equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
market price, and the denominator of which shall be the number
of shares of Preferred Stock and equivalent preferred shares
outstanding on such record date plus the number of additional
shares of Preferred Stock and/or equivalent preferred shares
to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and which should be conclusive for
all purposes. Shares of Preferred Stock and equivalent
preferred shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or
assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share
market price of the Preferred Stock (determined pursuant to
Section 11(d)
<PAGE>
18
hereof) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the
Company whose determination shall be described in a statement
filed with the Rights Agent and which shall be conclusive for
all purposes) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Preferred Stock,
and the denominator of which shall be such current per share
market price (determined pursuant to Section 11(d) hereof) of
the Preferred Stock; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) Except as otherwise provided herein, for the
purpose of any computation hereunder, the "current per share
market price" of any security (a "Security" for the purpose of
this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security
for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to but not including
such date; provided, however, that in the event that the
current per share market price of the Security is determined
during a period following the announcement by the issuer of
such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security, and prior to
the expiration of 30 Trading Days after but not including the
ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect
the current market price per share equivalent of such
Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported by the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System "NASDAQ" or such other system
then in use, or, if on any such date the Security is not
quoted by any such organization, the average of the closing
bid and asked
<PAGE>
19
prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of
the Company. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the
Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation
hereunder, if the Preferred Stock is publicly traded,
the "current per share market price" of the Preferred
Stock shall be determined in accordance with the
method set forth in Section 11(d)(i). If the
Preferred Stock is not publicly traded but the Common
Stock is publicly traded, the "current per share
market price" of the Preferred Stock shall be
conclusively deemed to be the current per share
market price of the Common Stock as determined
pursuant to Section 11(d)(i) multiplied by one
thousand (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction
occurring after the date hereof). If neither the
Common Stock nor the Preferred Stock is publicly
traded, "current per share market price" shall mean
the fair value per share as determined in good faith
by the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent and which shall be conclusive
for all purposes.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the
nearest cent or to the nearest one ten-thousandth of a share
of Preferred Stock or share of Common Stock or other share or
security as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than the Preferred Stock,
thereafter the Purchase Price and the number of such other
shares so receivable upon exercise of a Right shall be subject
to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect
to the Preferred Stock shall apply on like terms to any such
other shares.
<PAGE>
20
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-thousandths of
a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-thousandths of a share of
Preferred Stock (calculated to the nearest one ten- thousandth
of a share of Preferred Stock) obtained by (i) multiplying (x)
the number of one one-thousandths of a share covered by a
Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-thousandths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be
exercisable for the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public
announcement (with prompt notice thereof to the Rights Agent)
of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be
the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this
Section 11(i), the Company may, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders
<PAGE>
21
shall be entitled after such adjustment. Right Certificates so
to be distributed shall be issued, executed and countersigned
in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share
of Preferred Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-thousandths of a share of Preferred Stock which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of the Preferred Stock or other shares of
capital stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable
shares of Preferred Stock or other such shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect
to defer, with prompt notice thereof to the Rights Agent,
until the occurrence of such event the issuing to the holder
of any Right exercised after such record date of the Preferred
Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred
Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of
the Preferred Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the current market price,
issuance wholly for cash or Preferred Stock or securities
which by their terms are convertible into or exchangeable for
Preferred Stock, dividends on Preferred Stock payable in
shares of Preferred Stock or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Preferred Stock shall
not be taxable to such stockholders.
<PAGE>
22
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date
of this Agreement and prior to the Distribution Date, the
Company shall (i) declare or pay any dividend on the Common
Stock payable in Common Stock or (ii) effect a subdivision,
combination or consolidation of the Common Stock (by
reclassification or otherwise other than by payment of a
dividend payable in Common Stock) into a greater or lesser
number of Common Stock, then in any such case, the number of
Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately
following the occurrence of such event. The adjustments
provided for in this Section 11(n) shall be made successively
(but without duplication) whenever such a dividend is declared
or paid or such subdivision, combination or consolidation is
effected.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or
permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action
will diminish substantially or eliminate the benefits intended
to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of
the facts and computations accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common
Stock or the Preferred Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof (if so required under Section 25
hereof). 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 Assets or Earnings Power
(a) In the event, directly or indirectly, at any time
after any Person has become an Acquiring Person, (i) the
Company shall consolidate with or merge with and into any
other Person, (ii) any Person shall merge with and into the
Company and the Company shall be the surviving corporation of
such merger and, in connection with such merger, all or part
of the Common Stock shall be changed into or exchanged for
stock or other securities of any other Person (or of
<PAGE>
23
the Company) or cash or any other property, or (iii) the
Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating 50% or
more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other
than the Company or one or more of its wholly-owned
Subsidiaries), then upon the first occurrence of such event,
proper provision shall be made so that: (A) each holder of
record of a Right (other than Rights which have become null
and void pursuant to Section 11(a)(ii)) shall thereafter have
the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the
number of one one thousandths of a share of Preferred Stock
for which a Right was exercisable (whether or not such Right
was then exercisable) immediately prior to the time that any
Person first became an Acquiring Person (each as subsequently
adjusted pursuant to Sections 11(a)(i), 11(b), 11(c), 11(f),
11(h), 11(i) and 11(m)), in accordance with the terms of this
Agreement and in lieu of shares of Preferred Stock or Common
Stock of the Company, such number of validly issued, fully
paid and non-assessable and freely tradeable shares of Common
Stock of the Principal Party (as defined herein) not subject
to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number
of one one thousandths of a share of Preferred Stock for which
a Right was exercisable immediately prior to the time that any
Person first became an Acquiring Person (as subsequently
adjusted thereafter pursuant to Sections 11(a)(i), 11(b),
11(c), 11(f), 11(h), 11(i) and 11(m)) and (2) dividing that
product by 50% of the then current per share market price of
the Common Stock of such Principal Party (determined pursuant
to Section 11(d)(i) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; provided, that
the Purchase Price (as theretofore adjusted pursuant to
Sections 11(a)(i), 11(b), 11(c), 11(f), 11(h), 11(i)
and 11(m)) and the number of shares of Common Stock of such
Principal Party issuable upon exercise of each Right shall be
further adjusted as provided in Section 11(f) of this
Agreement to reflect any events occurring in respect of such
Principal Party after the date of such consolidation, merger,
sale or transfer; (B) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (C) the term "Company"
shall thereafter be deemed to refer to such Principal Party;
and (D) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of
its shares of Common Stock in accordance with Section 9
hereof) in connection with such consummation of any such
transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights;
provided, that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or
other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be
<PAGE>
24
entitled to receive, upon exercise of a Right and payment of
the Purchase Price as provided in this Section 13(a), such
cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had such holder, at
the time of such transaction, owned the Common Stock of the
Principal Party receivable upon the exercise of a Right
pursuant to this Section 13(a), and such Principal Party shall
take such steps (including, but not limited to, reservation of
shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clauses
(i) or (ii) of the first sentence of Section 13(a) hereof: (A)
the Person that is the issuer of the securities into which the
shares of Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the
issuer the shares of Common Stock of which have the greatest
aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other
party to the merger, if such Person survives said merger, or,
if there is more than one such Person, the Person the shares
of Common Stock of which have the greatest aggregate market
value of shares outstanding or (y) if the Person that is the
other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if
it survives) or (z) the Person resulting from the
consolidation; and
(ii) in the case of any transaction described in clause
(iii) of the first sentence in Section 13(a) hereof, the
Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons
as is the issuer of Common Stock having the greatest aggregate
market value of shares outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding,
or (3) if such Person is owned, directly or indirectly, by a joint venture
formed by
<PAGE>
25
two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person owned by
the joint venture was a Subsidiary of both or all of such joint venturers, and
the Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof unless
prior thereto the Company and the Principal Party involved therein
shall have executed and delivered to the Rights Agent an agreement
confirming that the requirements of Sections 13(a) and (b) hereof
shall promptly be performed in accordance with their terms and that
such consolidation, merger, sale or transfer of assets shall not
result in a default by the Principal Party under this Agreement as the
same shall have been assumed by the Principal Party pursuant to
Sections 13(a) and (b) hereof and providing that, as soon as
practicable after executing such agreement pursuant to this Section
13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and
the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and 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 Final Expiration Date, and similarly
comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the
New York Stock Exchange or on another national securities
exchange, to list or admit to trading (or continue the listing
of) the Rights and the securities purchasable upon exercise of
the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Stock of the Principal Party shall
not be listed or admitted to trading on the New York Stock
Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the
Rights to be reported by such other system then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of
outstanding Rights.
<PAGE>
26
(d) In case the Principal Party has provision in any of
its authorized securities or in its certificate of
incorporation or by-laws or other instrument governing its
corporate affairs, which provision would have the effect of
(i) causing such Principal Party to issue (other than to
holders of Rights pursuant to this Section 13), in connection
with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current
market price per share thereof (determined pursuant to Section
11(d) hereof) or securities exercisable for, or convertible
into, Common Stock of such Principal Party at less than such
then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the
issuance of the Common Stock of such Principal Party pursuant
to the provisions of Section 13, then, in such event, the
Company hereby agrees with each holder of Rights that it shall
not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement
providing that the provision in question of such Principal
Party shall have been cancelled, waived or amended, or that
the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with,
or as a consequence of, the consummation of the proposed
transaction.
(e) The Company covenants and agrees that it shall not,
at any time after a Person first becomes an Acquiring Person,
enter into any transaction of the type contemplated by clauses
(i), (ii) or (iii) of Section 13(a) hereof if (x) at the time
of or immediately after such consolidation, merger, sale,
transfer or other transaction there are any rights, warrants
or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights,
(y) prior to, simultaneously with or immediately after such
consolidation, merger, sale, transfer of other transaction,
the stockholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13(a)
hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates or Associates or
(z) the form or nature of organization of the Principal Party
would preclude or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price,
<PAGE>
27
regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market
maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board
of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock). Interests
in fractions of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided, that such agreement shall
provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they
are entitled as beneficial owners of the Preferred Stock
represented by such depositary receipts. In lieu of fractional
shares of Preferred Stock that are not integral multiples of
one one-thousandth of a share of Preferred Stock, the Company
shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current
market value of one share of Preferred Stock. For the purposes
of this Section 14(b), the current market value of a share of
Preferred Stock shall be the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right
(except as provided above).
Section 15 Rights of Action. All rights of action
in respect of this Agreement, excepting the rights of action expressly
given to the Rights Agent
<PAGE>
28
hereunder, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of
any Right Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Stock), on his own behalf and for his own benefit,
may 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 (or, prior to the Distribution Date, such Common Stock) in
the manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the
Common Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights
Agent if surrendered at the office or agency of the Rights
Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(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 Common Stock certificate or
Ownership Statement) 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 Common Stock certificate or Ownership
Statement 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 17. 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 the Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any
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 or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other
<PAGE>
29
actions affecting stockholders (except as provided in this
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the preparation, delivery,
amendment, administration or execution of this Agreement and
the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or
expense, incurred without gross negligence, bad faith or
willful misconduct (as finally determined by a court of
competent jurisdiction) on the part of the Rights Agent, for
any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending
against any claim of liability arising therefrom, directly or
indirectly. The indemnity provided herein shall survive the
termination of this Agreement, the resignation or removal of
the Rights Agent, and the termination and the expiration of
the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company.
Anything to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of the likelihood of such
loss or damage.
(b) The Rights Agent shall be authorized to rely on,
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 acceptance and administration of this
Agreement in reliance upon any Right Certificate or
certificate for the Preferred Stock or Common Stock or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise
upon the advice or opinion of counsel as set forth in Section
20 hereof.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.
(a) Any Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any
<PAGE>
30
successor Rights Agent shall be a party, or any Person
succeeding to the shareholder services business of the Rights
Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any
of the parties hereto; provided, that such Person would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered
the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its
changed name and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes only the specific duties and obligations expressly
set forth in this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the advice or
opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability as to any action taken,
suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by
any one of the Chairman of the Board of Directors, the Vice
President-Finance or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be
full authorization and protection to the
<PAGE>
31
Rights Agent for any action taken, suffered or omitted in good
faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own gross
negligence, bad faith or willful misconduct as finally
determined by a court of competent jurisdiction.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any liability
or responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its
countersignature thereof); nor shall it be liable or
responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right
Certificate; nor shall it be liable or responsible for any
change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3,
11, 13, 23 and 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate furnished pursuant
to Section 12, describing such change or adjustment); nor
shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of Preferred
Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from any person reasonably believed by the
Rights Agent to be one of the Chairman of the Board of
Directors, the Vice President-Finance 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, suffered or omitted by it in
good faith in accordance with instructions of any such officer
or for any delay in
<PAGE>
32
acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent
under this Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken, or
omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date
specified in such application (which date shall not be less
than five Business Days after the date any officer of the
Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date
in the case of an omission), the Rights Agent shall have
received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, affiliate,
director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other Person or
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.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder or in the exercise of its rights if it
believes that repayment of such funds or adequate
indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the
case may be, has not been completed to certify the holder is
not an Acquiring Person (or an Affiliate or Associate
thereof), a Rights Agent shall not take any further action
with respect to such requested exercise or transfer without
first consulting with the Company.
<PAGE>
33
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days' notice in writing mailed
to the Company and to each transfer agent of the Common Stock or
Preferred Stock by registered or certified mail, and, following the
Distribution Date, 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 Stock or Preferred Stock by
registered or certified mail, and, following the Distribution Date, 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) a Person organized and doing business under the laws of
the United States or any State thereof, which is authorized under such
laws to perform shareholder services and is subject to supervision or
examination by federal or state authority and which at the time of its
appointment as Rights Agent has, or is an affiliate of a corporation
that has, a combined capital and surplus of at least $50 million.
After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any
such appointment the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common
Stock or Preferred Stock, and, following the Distribution Date, mail a
notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made
in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of Common Stock following the
Distribution Date and prior to the earlier of the Redemption Date and
the
<PAGE>
34
Final Expiration Date, the Company may with respect to shares of
Common Stock so issued or sold pursuant to (i) the exercise of stock
options, (ii) under any employee plan or arrangement, (iii) upon the
exercise, conversion or exchange of securities notes or debentures
issued by the Company or (iv) a contractual obligation of the Company
in each case existing prior to the Distribution Date, issue Right
Certificates representing the appropriate number of Rights in
connection with such issuance or sale.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at any
time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the redemption
price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. The
Redemption Price shall be payable at the option of the
Company, in cash, shares of Common Stock, or such other form
of consideration as the Board of Directors shall determine.
(b) Immediately upon the action of the Board of
Directors ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23 (or at such later time as the
Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any
notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give
public notice of any such redemption and prompt notice thereof
to the Rights Agent; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action
of the Board of Directors ordering the redemption of the
Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the
Company shall mail a notice of redemption to all the holders
of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which the
payment of the Redemption Price will be made.
Section 24. Exchange
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section
11(a)(ii) hereof) for
<PAGE>
35
shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
in respect of the Common Stock after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time
after an Acquiring Person shall have become the Beneficial
Owner of shares of Common Stock aggregating 50% or more of the
shares of Common Stock then outstanding. From and after the
occurrence of an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exchanged pursuant to
this Section 24(a) shall thereafter be exercisable only in
accordance with Section 13 and may not be exchanged pursuant
to this Section 24(a). The exchange of the Rights by the Board
of Directors may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole
discretion may establish.
(b) Immediately upon the effectiveness of the action of
the Board of Directors of the Company ordering the exchange of
any Rights pursuant to paragraph (a) of this Section 24 and
without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such
exchange, with prompt notice thereof to the Rights Agent;
provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange.
The Company shall promptly mail a notice of any such exchange
to all of the holders of the Rights so exchanged at their last
addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state
the method by which the exchange of the shares of Common Stock
for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become null and
void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights.
(c) The Company may at its option substitute, and, in
the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company shall substitute, to the
extent of such insufficiency, for each share of Common Stock
that would otherwise be issuable upon exchange of a Right, a
number of shares of Preferred Stock or fractions thereof (or
equivalent preferred shares as such term is defined in Section
11(b)) having an aggregate current per share market price
(determined pursuant to Section 11(d) hereof) equal to the
current per share market price of one share of
<PAGE>
36
Common Stock (determined pursuant to Section 11(d) hereof) as
of the date of issuance of such shares of Preferred Stock or
fractions thereof (or equivalent preferred shares).
(d) The Company shall not, in connection with any
exchange pursuant to this Section 24, be required to issue
fractions of shares of Common Stock or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right Certificates
with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the
current market value of a whole share of Common Stock shall be
the closing price of a share of Common Stock (as determined
pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall at any time after the
earlier of the Distribution Date or the Stock Acquisition Date
propose (i) to pay any dividend payable in stock of any class
to the holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock (other than
a regular quarterly cash dividend), (ii) to offer to the
holders of its Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only
the subdivision of outstanding Preferred Stock), (iv) to
effect the liquidation, dissolution or winding up of the
Company, (v) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other
transfer) in one or more transactions of 50% or more of the
assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or (vi) to declare or
pay any dividend on the Common Stock payable in Common Stock
or to effect a subdivision, combination or consolidation of
the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock), then, in each such
case, the Company shall give to each holder of a Right
Certificate and to the Rights Agent, each in accordance with
Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date
on which such liquidation, dissolution or winding up is to
take place and the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders
of the Preferred Stock for purposes of such action,
<PAGE>
37
and in the case of any such other action, at least 10 days
prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common
Stock and/or Preferred Stock, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur then the Company shall as soon as
practicable thereafter give to each holder of a Right
Certificate (or if occurring prior to the Distribution Date,
the holders of the Common Stock) in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event
to holders of Rights under Section 11(a)(ii) and Section 13
hereof.
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:
Curtiss-Wright Corporation
1200 Wall Street
Lyndhurst, NJ 07071
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
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:
ChaseMellon Shareholder Services, L.L.C.
44 Wall Street
6th Floor
New York, NY 10005
Attention: Relationship Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Except as
provided in the penultimate sentence of this Section 27, for so long
as the Rights are then redeemable, the Company may in its sole and
absolute discretion, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Agreement in any
respect without the approval of any holders of the Rights. At any time
when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this
<PAGE>
38
Section 27, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights; provided, that no such supplement
or amendment may (a) adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), (b) cause the Rights again to
become redeemable or (c) cause the Agreement again to become amendable
other than in accordance with this sentence. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or
amendment shall be made which changes the Redemption Price. Upon the
delivery of a certificate from an appropriate officer of the Company
which states that the supplement or amendment is in compliance with
the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment, provided that any supplement or amendment
that does not change or affect the rights, duties, liabilities or
obligations of the Rights Agent shall become effective immediately
upon execution by the Company, whether or not also executed by the
Rights Agent.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company or
the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock)
any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement or applicable to this
Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware 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; provided, however, that all provisions regarding the
rights, duties and obligations of the Rights Agent shall be governed
by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such
State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such counterparts
shall for all purposes be
<PAGE>
39
deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
Section 34. Administration. The Board of Directors
of the Company shall have the exclusive power and authority to
administer and interpret the provisions of this Agreement and to
exercise all rights and powers specifically granted to the Board of
Directors or the Company or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Agreement and
(ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend or not
amend this Agreement). All such actions, calculations, determinations
and interpretations which are done or made by the Board of Directors
in good faith shall be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties. The
Rights Agent is entitled to always assume the Board of Directors acted
in good faith and shall be fully protected and incur no liability in
reliance thereon.
[The remainder of this page intentionally left blank.]
<PAGE>
40
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
Attest: CURTISS-WRIGHT CORPORATION
By: /s/ Brian D. O'Neill By: /s/ Robert A. Bosi
------------------------- ------------------------
Name: Brian D. O'Neill Name: Robert A.Bosi
Title: Corporate Secretary Title: Vice President, Finance
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ Regina Brown
------------------------------
Name: Regina Brown
Title: Vice President
<PAGE>
Exhibit A
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PARTICIPATING PREFERRED STOCK
OF
CURTISS-WRIGHT CORPORATION
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
-------------------
Curtis-Wright Corporation, a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Company"), hereby certifies that the following resolution was duly
adopted by the Board of Directors of the Company as required by Section 151 of
the General Corporation Law of the State of Delaware at a meeting duly called
and held on November 6, 2000:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Company's
Restated Certificate of Incorporation, as amended to date (hereinafter called
the "Certificate of Incorporation"), the Board of Directors hereby creates a
series of Preferred Stock, par value $1 per share (the "Preferred Stock"), of
the Company and hereby states the designation and number of shares, and fixes
the relative rights, powers and preferences thereof, and the limitations
thereof, as follows:
(A) Designation and Amount. The shares of such series
shall be designated as "Series A Participating Preferred
Stock" (the "Series A Preferred Stock") and the number of
shares constituting the Series A Preferred Stock shall be
100,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series A
Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities
issued by the Company convertible into Series A Preferred
Stock.
<PAGE>
2
(B) Dividends and Distributions.
(1) Subject to the rights of the holders of any shares
of any stock of the Company ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the
holders of shares of Series A Preferred Stock, in preference
to the holders of Common Stock, par value $1 per share (the
"Common Stock") and of any other stock of the Company ranking
junior to the Series A Preferred Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors
out of funds legally available for such purpose, quarterly
dividends payable in cash on the last day of March, June,
September and December in each year (each such date being
referred to herein as a "Dividend Payment Date"), commencing
on the first Dividend Payment Date after the first issuance of
a share or fraction of a share of Series A Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the
greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate
per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable
in shares of Common Stock, declared on the Common Stock since
the immediately preceding Dividend Payment Date or, with
respect to the first Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Company shall at any time
after November 6, 2000, declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series
A Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(2) The Company shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided, that,
in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Dividend Payment Date and the next subsequent Dividend Payment
Date, a dividend of $1 per share on the Series A Preferred
Stock shall
<PAGE>
3
nevertheless be payable, when, as and if declared,
on such subsequent Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative,
whether or not earned or declared, on outstanding shares of
Series A Preferred Stock from the Dividend Payment Date next
preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares,
or unless the date of issue is a Dividend Payment Date or is a
date after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Dividend Payment Date, in
either of which events such dividends shall begin to accrue
and be cumulative from such Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment
thereof.
(C) Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights;
(1) Each whole share of Series A Preferred Stock shall
entitle the holder thereof to 1 vote on all matters upon which
the holders of the Common Stock of the Company are entitled to
vote.
(2) Except as otherwise provided herein, in the
Certificate of Incorporation or in any other Certificate of
Designations creating a series of Preferred Stock or any
similar stock, and except as otherwise required by law, the
holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the
Company having general voting rights shall vote together as
one class on all matters submitted to a vote of stockholders
of the Company.
(3) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any
corporate action.
<PAGE>
4
(D) Certain Restrictions.
(1) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
earned or declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall
not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (as to dividends
or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on
the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Company ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock or rights, warrants or options to acquire
such junior stock;
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
<PAGE>
5
(2) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any
shares of stock of the Company unless the Company could, under
paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
(E) Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof.
(F) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no
distribution shall be made (1) to the holders of the Common Stock
or of shares of any other stock of the Company ranking junior, upon
liquidation, dissolution or winding up, to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount equal to the greater
of (i) $1,000 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or
declared, to the date of such payment and (ii) an aggregate amount
per share, subject to the provision for adjustment hereinafter set
forth, equal to 1,000 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity upon liquidation,
dissolution or winding up with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all
such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Company shall at any
time after November 6, 2000, declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the
proviso in clause (A) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(G) Consolidation, Merger, etc. In case the Company shall
enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are converted into,
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly
converted into, exchanged for or changed into an amount per share
<PAGE>
6
(subject to the provision for adjustment hereinafter set forth)
equal to 1,000 times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is
converted, exchanged or converted. In the event the Company shall
at any time after November 6, 2000, declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the
conversion, exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(H) No Redemption. The shares of Series A Preferred Stock
shall not be redeemable from any holder.
(I) Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets
upon liquidation, dissolution or winding up of the Company, senior
to the Common Stock.
(J) Amendment. If any proposed amendment to the Certificate
of Incorporation (including this Certificate of Designations) would
alter, change or repeal any of the preferences, powers or special
rights given to the Series A Preferred Stock so as to affect the
Series A Preferred Stock adversely, then the holders of the Series
A Preferred Stock shall be entitled to vote separately as a class
upon such amendment, and the affirmative vote of two-thirds of the
outstanding shares of the Series A Preferred Stock, voting
separately as a class, shall be necessary for the adoption thereof,
in addition to such other vote as may be required by the General
Corporation Law of the State of Delaware.
<PAGE>
7
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Company by its _____________ and attested by its
Secretary this 6th day of November, 2000.
-----------------------------
Name:
Title:
Attest:
--------------------------
Secretary
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- ____ ___ Rights
NOT EXERCISABLE AFTER NOVEMBER 6, 2010 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON
(AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
CURTISS-WRIGHT CORPORATION
This certifies that ___________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of November 6, 2000, as the same may be amended from time to
time (the "Rights Agreement"), between Curtiss-Wright Corporation, a Delaware
corporation (the "Company"), and ChaseMellon Shareholder Services, L.L.C, as
Rights Agent (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on the earlier of November 6, 2010
or the earlier expiration of the Rights in accordance with the terms of the
Rights Agreement in accordance with its terms, at the office or agency of the
Rights Agent designated for such purpose, or of its successor as Rights Agent,
one one-thousandth of a fully paid non-assessable share of Series A
Participating Preferred Stock, par value $1 per share (the "Preferred Stock"),
of the Company, at a purchase price of $235 per one one-thousandth of a share of
Preferred Stock (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of one
one-thousandths of a share of Preferred Stock which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of November 6, 2000, based on the Preferred
Stock as constituted at such date. As provided in the Rights Agreement, the
Purchase Price, the number of one one-thousandths of a share of Preferred Stock
(or other securities or property) which may be purchased upon the exercise of
the Rights and the number of Rights evidenced by this Right Certificate are
subject to modification and adjustment upon the happening of certain events.
Notwithstanding anything in the Rights Agreement to the
contrary, from and after the time (the "invalidation time") when any person
first becomes an Acquiring Person (as defined in the Rights Agreement), the
Rights evidenced hereby beneficially owned by (x) any Acquiring Person (or any
Affiliate (as defined in the Rights Agreement) or Associate (as defined in the
Rights Agreement) of any Acquiring Person), (y) a transferee of any Acquiring
Person (or
<PAGE>
2
any such Affiliate or Associate) who becomes a transferee after the
invalidation time or (z) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who became a transferee prior to or concurrently with
the invalidation time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of Section 11(a)(ii) of the Rights
Agreement, and subsequent transferees of such persons, shall be void without any
further action and any holder hereof shall thereafter have no rights whatsoever
with respect to the Rights evidenced hereby under any provision of the Rights
Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or agency of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be exchanged in whole or in part for shares
of Preferred Stock or shares of the Company's Common Stock, par value $1 per
share and (iii) shall expire automatically upon the consummation of the merger
pursuant to the Agreement and Plan of Merger, dated as of November 6, 2000, by
and among the Company, Unitrin, Inc., a Delaware corporation, and CW Disposition
Company, a Delaware corporation.
No fractional shares of Preferred Stock or Common Stock will
be issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Stock or of any other
<PAGE>
3
securities of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement) or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
<PAGE>
4
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of November 6, 2000.
ATTEST: CURTISS-WRIGHT CORPORATION
By __________________ By __________________
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
---------------------------------
as Rights Agent
By _________________________
Authorized Signature
<PAGE>
5
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfer unto__________________________
------------------------------------------------------------
(Please print name and address of transferee)
------------------------------------------------------------
Rights represented by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
___________________ Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated: _________________
------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being assigned to, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------
Signature
<PAGE>
6
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To CURTISS-WRIGHT CORPORATION:
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase the
shares of Preferred Stock (or other securities or property) issuable upon the
exercise of such Rights and requests that certificates for such shares of
Preferred Stock (or such other securities) be issued in the name of:
--------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivery to:
Please insert social security
or other identifying number
--------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------
Dated: ____________________
------------------------
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a member of firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States.
<PAGE>
7
Form of Reverse Side of Right Certificate -- continued
-----------------------------------------------------------------
(To be completed)
The undersigned certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement)
----------------------
Signature
-----------------------------------------------------------------
NOTICE
------
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
<PAGE>
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On November 6, 2000, the Board of Directors of Curtiss-Wright
Corporation (the "Company") declared a dividend of one preferred stock purchase
right (a "Right") for each outstanding share of Common Stock, par value $1 per
share, of the Company (the "Common Stock"). The dividend is payable on November
21, 2000 (the "Record Date") to the stockholders of record on that date. Each
Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Participating Preferred Stock, par value
$1 per share (the "Preferred Stock") of the Company at a price of $235 per one
one-thousandth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement, dated as of November 6, 2000, as the same may be amended from time to
time (the "Rights Agreement"), between the Company and ChaseMellon Shareholder
Services, L.L.C. a New Jersey limited liability company, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 business days (or such later date
as may be determined by action of the Board of Directors prior to such time as
any person or group of affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding shares of
Common Stock (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the shares of Common Stock
represented by certificates for Common Stock or shares of Common Stock
represented by ownership statements issued with respect to uncertificated shares
of Common Stock ("Ownership Statement") outstanding as of the Record Date, by
such Common Stock certificate or Ownership Statement together with a copy of
this Summary of Rights attached thereto. Unitrin, Inc. and its subsidiaries
currently own approximately 43% of the outstanding shares of Common Stock. The
Rights Agreement does not restrict the Unitrin companies so long as they do not
acquire beneficial ownership of additional shares of Common Stock in excess of
1% of the outstanding shares of Common Stock at such time.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock certificates
or Ownership Statements issued after the Record Date upon
<PAGE>
2
transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for shares of Common Stock outstanding as of the Record Date, or
the transfer of any shares of Common Stock represented by an Ownership
Certificate outstanding on the Record Date, in either case with or without such
notation or a copy of this Summary of Rights, will also, except as otherwise
provided, constitute the transfer of the Rights associated with the shares of
Common Stock represented by such certificate or Ownership Statement. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire no later than November 6, 2010 (the "Final Expiration
Date"), unless the Final Expiration Date is amended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described below,
and the Rights will expire at such time as the merger to be effected pursuant to
the Agreement and Plan of Merger dated as of November 6, 2000, by and among the
Company, Unitrin, Inc., a Delaware corporation and CW Disposition Company, a
Delaware corporation, is consummated.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for or purchase
Preferred Stock at a price, or securities convertible into Preferred Stock with
a conversion price, less than the then-current market price of the Preferred
Stock or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular periodic cash dividends
or dividends payable in Preferred Stock) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights are also subject to
adjustment in the event of a stock split of the Common Stock or a stock dividend
on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock will be entitled,
when, as and if declared, to a minimum preferential quarterly dividend payment
of $1.00 per share but will be entitled to an aggregate dividend of 1,000 times
the dividend declared per share of Common Stock. In the event of liquidation,
the holders of the Preferred Stock will be entitled to a minimum preferential
liquidation payment equal to the greater of (i) $1,000 per share (plus any
accrued but unpaid dividends) and (ii) an aggregate payment of 1,000 times the
payment made per share of Common Stock. Each share of Preferred Stock will have
one vote, and will vote together with the Common Stock. Finally, in the event of
any merger, consolidation or other transaction in which shares of Common Stock
are converted or exchanged, each share of Preferred Stock will be
<PAGE>
3
entitled to receive 1,000 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend and
liquidation rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock, except that each one one-thousandth of a
share of Preferred Stock will only have one one-thousandth of a vote.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper provision will be made so
that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person or any affiliate or associate of the Acquiring Person or
certain other transferees (which will thereupon become void), will thereafter
have the right to receive upon exercise of a Right at the then current exercise
price of the Right, that number of shares of Common Stock, or that number of one
one-thousandths of a share of Preferred Stock, having a market value of two
times the exercise price of the Right.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
(other than Rights beneficially owned by an Acquiring Person or any affiliate or
associate of the Acquiring Person or certain other transferees which will have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of shares
of common stock of the person with whom the Company has engaged in the foregoing
transaction (or its parent), which number of shares at the time of such
transaction will have a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding shares of Common Stock or the occurrence of an event described
in the prior paragraph, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-thousandth of a share of Preferred Stock (or of a share of a class or
series of the Company's preferred stock having equivalent rights, preferences
and privileges, other than voting rights), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes
such, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such
<PAGE>
4
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company
may, except with respect to the redemption price, amend the Rights in any
manner. After the Rights are no longer redeemable, the Company may, except with
respect to the redemption price, amend the Rights in any manner that does not
adversely affect the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated November 8, 2000. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
