_______________________________________
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
Page
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 then outstanding;
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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;
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(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
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.
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(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
5:00P.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 upon adoption as and set forth in the Form of
Certificate of Designations attached to this Agreement as Exhibit A.
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(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 the tenth day after the Stock Acquisition
Date or 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 evidenced (subject to the provisions of
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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:
<PAGE>
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 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.
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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 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.
<PAGE>
(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"), (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.
<PAGE>
(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>
(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.
<PAGE>
(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 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>
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>
(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 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).
<PAGE>
(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) above within thirty (30)
<PAGE>
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).
<PAGE>
(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 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.
<PAGE>
(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) 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
<PAGE>
on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities
exchange, a Business Day.
(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>
(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 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.
<PAGE>
(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>
(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
<PAGE>
of 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 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.
<PAGE>
(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
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.
<PAGE>
(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>
(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
<PAGE>
Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of
the Company shall be used.
(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).
<PAGE>
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 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 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.
<PAGE>
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 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.
<PAGE>
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 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.
<PAGE>
(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 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>
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 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.
<PAGE>
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 shares
of Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock
<PAGE>
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
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).
<PAGE>
(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, 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.
<PAGE>
(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
<PAGE>
this 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.
<PAGE>
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 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>
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>
(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
<PAGE>
Stock shall 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>
(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) eedeem 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>
(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 (subject to the provision for
<PAGE>
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>
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>
<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 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.
<PAGE>
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.
<PAGE>
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 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>
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>
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>
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>
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>
<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
<PAGE>
or Ownership Statements issued after the Record Date upon 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 entitled to
receive 1,000 times the amount received per share of Common Stock. These rights
are protected by customary antidilution provisions.
<PAGE>
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 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.
<PAGE>
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.
<PAGE>
