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FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
DANA CORPORATION
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Virginia 34-4361040
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(State of incorporation or organization) (IRS Employer Identification No.)
4500 Dorr Street, Toledo, Ohio 43615
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(Address of principal executive offices) (Zip Code)
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Securities to be registered pursuant to Section 12(b) of the Act:
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<S> <C>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Series A Junior Participating Preferred Stock New York Stock Exchange
Purchase Rights Pacific Stock Exchange
International (London) Exchange
</TABLE>
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. [ ]
If this Form relates to the registration of a class of debt securities and is
to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On April 15, 1996, the Board of Directors (the "Board") of Dana Corporation
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $1 per share
(the "Common Shares") of the Company. The dividend is payable on July 25,
1996, to the shareholders of record on that date.
Each Right entitles the holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, no par value (the
"Preferred Shares") of the Company at a price of $110 per one one-thousandth of
a Preferred Share (the "Purchase Price").
A complete description of the Rights is set forth in the Rights Agreement (the
"Rights Agreement") made as of April 25, 1996, between the Company and Chemical
Mellon Shareholder Services, L.L.C., the Rights Agent, a copy of which is filed
as Exhibit 1 to this Form 8-A. The Rights Agreement is incorporated herein by
reference and this summary is qualified in its entirety by reference thereto.
The Rights Agreement provides that the Rights will not be exercisable until the
Distribution Date, which will be the earlier 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
Company's outstanding Common Shares, or (ii) 10 business days (or such later
date as is established by the Board before any person or group becomes an
Acquiring Person) following the commencement of, or the announcement of an
intention to make, a tender offer or exchange offer which, if consummated, would
result in the beneficial ownership by a person or group of 15% or more of the
Company's outstanding Common Shares.
Until the Distribution Date (or the earlier redemption or expiration of the
Rights), the Rights will be transferred with, and only with, the Common Shares.
For Common Shares outstanding as of July 25, 1996, the Rights will be evidenced
by the certificates for such Common Shares with a copy of this Summary of
Rights attached. For Common Shares issued thereafter, the Rights will be
evidenced by a notation on the certificate incorporating the Rights Agreement
by reference. In either case, until the Distribution Date (or the earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificate for Common Shares, even without the notation or the attached copy
of this Summary, will constitute the transfer of the Rights associated with the
Common Shares represented by the certificate. As soon as practicable after the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date, and thereafter such separate
Right Certificates alone will evidence the Rights.
If any person or group of affiliated or associated persons becomes an Acquiring
Person, each holder of a Right (other than the Acquiring Person, whose Rights
will have become void) will be entitled, upon the exercise of the Right, to
receive that number of Common
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Shares having a market value of two times the exercise price of the Right. In
addition, if, after a person or group has become an Acquiring Person, the
Company is acquired in a merger or other business combination transaction or if
50% or more of its consolidated assets or earning power are sold, each holder
of a Right will be entitled to receive, upon the exercise of the Right at its
then current exercise price, that number of shares of common stock of the
acquiring company having a market value at the time of such event of two times
the exercise price of the Right.
At any time before an Acquiring Person acquires beneficial ownership of 15% or
more of the Company's outstanding Common Shares, the Board may redeem the
Rights in whole, but not in part, at a price of $.01 per Right, on such terms
as the Board may establish in its sole discretion. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the holders will be entitled only to receive the foregoing redemption price.
At any time after any person or group becomes an Acquiring Person, but before
the Acquiring Person acquires 50% or more of the Company's outstanding Common
Shares, the Board may exchange the Rights (other than those held by the
Acquiring Person, which will have become void), in whole or part, at an
exchange ratio of one Common Share or one one-thousandth of a Preferred Share
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges) per Right.
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share issuable upon exercise of each Right are subject to adjustment
if, prior to the Distribution Date, there is a stock split of the Common
Shares; a stock dividend on the Common Shares payable in Common Shares; or a
subdivision, consolidation or combination of the Common Shares.
The Purchase Price and the number of Preferred Shares or other securities or
property issuable upon exercise of the Rights are also subject to adjustment to
prevent dilution: in the event of a stock dividend or of a subdivision,
combination or reclassification of the Preferred Shares; upon the grant to the
Preferred Share holders of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price less than the then-current market price or
securities convertible into Preferred Shares with a conversion price less than
the then-current market price for the Preferred Shares; or upon the
distribution to the Preferred Share holders of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants other than those referred to above. 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.
The holder of a Right, as such, will have no rights as a shareholder of the
Company (including, without limitation, the right to vote or to receive
dividends) until the Right is exercised. The terms of the Rights may be
amended by the Board without the consent of the holders of the Rights, provided
that no amendment adversely affects the interests of the holders.
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If not exercised, redeemed or exchanged sooner, the Rights will expire on July
25, 2006, unless such expiration date is extended.
A complete description of the Preferred Shares is set forth in the Company's
Amended Articles of Incorporation (the "Articles"), a copy of which is filed by
reference as Exhibit 2 to this Form 8-A. The Articles are incorporated herein
by reference and the following summary is qualified in its entirety by
reference thereto.
If issued, the Preferred Shares will be entitled to a cumulative preferential
quarterly dividend per share equal to the greater of $10 or 100 times the
dividend declared on the Company's Common Shares. The Preferred Shares will be
redeemable in whole at the Company's option at a cash price per share of the
greater of $100 or 100 times the Current Market Price (as defined in the
Articles) of the Common Shares. In the event of liquidation, the holders of
the Preferred Shares will be entitled to receive an amount equal to accrued and
unpaid dividends, plus an amount per share equal to the greater of $100 or 100
times the payment made per share to holders of Common Shares. Each Preferred
Share will be entitled to 100 votes, voting together with the holders of the
Common Shares on all matters submitted to the vote of shareholders. In the
event of any merger, consolidation or other transaction in which Common Shares
are exchanged, the holder of each Preferred Share will be entitled to receive
100 times the amount and type of consideration paid per Common Share. The
rights of the holders of Preferred Shares as to dividends and liquidations,
their voting rights, and their rights in the event of mergers and
consolidations, are protected by customary anti-dilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and voting
rights, the value of the one one-thousandth of a Preferred Share purchasable
upon the exercise of each Right should approximate the value of one Common
Share.
No fractional Preferred Shares will be issued (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of exercise.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Company's Board prior to the time that any person or group has acquired
beneficial ownership of 15% or more of the Common Shares, since until such time
the Rights may be redeemed by the Company at a price of $.01 each.
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ITEM 2. EXHIBITS.
The following items are filed as exhibits to the registration statement:
<TABLE>
<CAPTION>
Exhibit No. Description of Document Location
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<S> <C> <C>
1 Rights Agreement dated as of April 25, 1996, between Dana Corporation Pages
and Chemical Mellon Shareholder Services, L.L.C., Rights Agent, 8-46 of this
including Exhibit A (Form of Right Certificate and Forms of Form 8-A
Assignment and of Election to Purchase) and Exhibit B (Summary of
Rights to Purchase Preferred Shares) thereto
2 Restated Articles of Incorporation of Dana Corporation, amended
effective June 1, 1994, filed by reference to Registrant's Form 8-A/A,
Amendment No. 3, dated October 4, 1994
3 Form of press release announcing the declaration of the Rights Pages
47-48 of this
Form 8-A
4 Form of letter to shareholders announcing the declaration of Pages
the Rights 49-52 of this
Form 8-A
</TABLE>
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
DANA CORPORATION (Registrant)
Date: May 1, 1996 By: Martin J. Strobel
------------------------------------
Martin J. Strobel
Vice President, General Counsel and
Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Document Page No.
----------- ----------------------- ---------
<S> <C> <C>
1 Rights Agreement dated as of April 25, 1996, between Dana Pages
Corporation and Chemical Mellon Shareholder Services, L.L.C., 8-46
Rights Agent, including Exhibit A (Form of Right Certificate and
Forms of Assignment and of Election to Purchase) and Exhibit B
(Summary of Rights to Purchase Preferred Shares) thereto
Rights Certificates, in the form filed as Exhibit A to the Rights
Agreement, will be issued only at such time as the Rights are
triggered. Until then, the Rights will be evidenced by either a
copy of the Summary of Rights, in the form filed as Exhibit B to
the Rights Agreement, or a notation on the Common Share
certificates.
2 Restated Articles of Incorporation of Dana Corporation, amended
effective June 1, 1994, filed by reference to Registrant's Form
8-A/A, Amendment No. 3, dated October 4, 1994
3 Form of press release announcing the declaration of the Rights Pages
47-48
4 Form of letter to shareholders announcing the declaration of Pages
the Rights 49-52
</TABLE> 7
<PAGE> 1
EXHIBIT 1
RIGHTS AGREEMENT
BY AND BETWEEN
DANA CORPORATION
AND
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
RIGHTS AGENT
DATED AS OF APRIL 25, 1996
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates . . . . . . . . . . . . . . . . . . 6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . 7
Section 8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . 8
Section 9. Availability of Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 10. Preferred Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights . . . . . . . . . . . . . 10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . 17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . 17
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . . . . . . . . . . . . 21
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . 21
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
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<TABLE>
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Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Exhibit A - Form of Right Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Exhibit B - Summary of Rights to Purchase Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT ("Agreement"), dated as of April 25, 1996, is made
between DANA CORPORATION, a Virginia corporation (the "Company"), and CHEMICAL
MELLON SHAREHOLDER SERVICES, L.L.C. (the "Rights Agent").
The Board of Directors of the Company (the "Board") has authorized and declared
a dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding on July 25, 1996 (the
"Record Date"), each Right representing the right to purchase one
one-thousandth of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements herein
set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as
such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or more
of the Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result
of an acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 15% or more of the
Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional Common Shares
of the Company, then such Person shall be deemed to be an "Acquiring
Person." Notwithstanding the foregoing, if the Board determines in
good faith that a Person who would otherwise be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this Section 1(a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this Section 1(a), then such Person shall not
be deemed to be an "Acquiring Person" for any purposes of this
Agreement.
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(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 and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly
(ii) which such Person or any of such Person's Affiliates or
Associates has:
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange;
or
(B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy
or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect
to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the 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.
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(d) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in New York City are authorized or
obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean the
shares of common stock, $1 par value per share, of the Company.
"Common Shares" when used with reference to any Person other than the
Company, shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(g) "Distribution Date" shall mean the earlier of
(i) the tenth day after the Shares Acquisition Date (as such term is
hereinafter defined), or
(ii) the tenth business day (or such later date as may be determined
by action of the Board prior to such time as any Person becomes
an Acquiring Person) after the date of the commencement by any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or the first public
announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such
plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of
Common Shares aggregating 15% or more of the then outstanding
Common Shares (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights).
(h) "Final Expiration Date" shall mean July 25, 2006.
(i) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotations System.
(j) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such
entity.
(k) "Preferred Shares" shall mean shares of Series A Junior Participating
Preferred Stock, no par value per share, of the Company.
(l) The "Purchase Price" for each one one-thousandth of a Preferred Share
purchasable pursuant to the exercise of a Right shall mean $110,
subject to adjustment from time to time as provided in Sections 11 and
13 hereof.
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(m) "Redemption Date" shall mean that date, if any, on which the Board
shall redeem the Rights as provided in Section 23 hereof.
(n) "Redemption Price" shall mean $.01 per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof.
(o) "Right Certificate" shall mean certificates evidencing ownership of
Rights in substantially the form set out in Exhibit A hereto.
(p) "Share Exchange" shall mean a share exchange pursuant to section
13.1-717 of the Virginia Stock Corporation Act.
(q) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(r) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by
such Person.
(s) "Trading Day" shall mean a day on which the principal national
securities exchange on which a 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.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the Common Shares) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) On July 25, 1996, or as soon as practicable thereafter, the Company
shall send a copy of a Summary of Rights to Purchase Preferred Shares,
in substantially the form of Exhibit B hereto, by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the
close of business on that date, at the address of such holder shown on
the records of the Company.
(b) With respect to certificates for Common Shares outstanding as of July
25, 1996, until the Distribution Date, the Rights shall be evidenced
by such certificates registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certificates) and
the right to receive Right Certificates shall be transferable only in
connection with the transfer of Common Shares.
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Until the Distribution Date (or the earlier of the Redemption Date or Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding on July 25, 1996, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby, and certificates
newly issued pursuant to such transfer shall have printed onto them the legend
set forth in Section 3(c). If any legend (a "Prior Legend") appears on such
certificates pursuant to the Rights Agreement by and between Dana Corporation
and Chemical Bank, dated as of July 14, 1988, as amended (the "Earlier Rights
Agreement"), as the Common Shares represented by such certificates are
transferred, the Prior Legend shall be removed and deleted, and shall in any
event be without any further force or effect.
(c) Certificates for Common Shares which are issued after July 25, 1996,
but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date, shall have impressed on, printed
on, written on, or otherwise affixed to them the following legend:
"This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between Dana
Corporation and Chemical Mellon Shareholder Services, L.L.C.,
dated as of April 25, 1996 (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 Dana
Corporation. Under certain circumstances, as set forth in the
Rights Agreement, such Rights shall be evidenced by separate
certificates and shall no longer be evidenced by this
certificate. Dana Corporation shall mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring Person (as defined
in the Rights Agreement) may become null and void."
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the event
that the Company purchases or acquires any Common Shares after July
25, 1996, but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
(d) As soon as practicable after the Distribution Date, the Company shall
prepare and execute, the Rights Agent shall countersign, and the
Company shall send or cause to be sent (and the Rights Agent shall, if
requested, send) by first-class, insured, postage-prepaid mail, to
each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records
of the Company, a Right Certificate evidencing one Right for each
Common Share so held. As of the Distribution Date, the Rights shall
be evidenced solely by such Right Certificates.
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<PAGE> 9
SECTION 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the forms of election to purchase Preferred Shares
and of assignment to be printed on the reverse thereof) shall be substantially
the same as Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a Preferred Share as shall be set forth therein at the
Purchase Price set forth therein, but the number of such one one-thousandths of
a Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
The Right Certificates shall be executed on behalf of the Company by any of its
Chairman of the Board, its President, Treasurer or any Assistant Treasurer, or
any Executive Vice President or Vice President, and attested by any of its by
Secretary or any Assistant Secretary, either manually or by facsimile
signature. The Right Certificates shall not be valid for any purpose unless
countersigned by the Rights Agent. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before counter signature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who holds any
such office at the actual date of the execution of such Right Certificate,
although at the date of the execution of this Rights Agreement such person was
not such an officer.
Following the Distribution Date, the Rights Agent shall keep or cause to be
kept, at its shareholder services offices, 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.
Subject to the provisions of Section 14 hereof, at any time after the close of
business on the Distribution Date and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or other Right
Certificates, entitling the registered holder to purchase a like number of one
6
<PAGE> 10
one-thousandths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company shall 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) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the
Right Certificate (with the form of election to purchase on the
reverse side thereof duly executed) to the Rights Agent at the
principal office of the Rights Agent, together with payment of the
Purchase Price for each one one-thousandth of a Preferred Share as to
which the Rights are exercised, at or prior to the earliest of
(i) the close of business on the Final Expiration Date,
(ii) the Redemption Date, or
(iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price shall be payable in lawful money of the United
States of America in accordance with Section 7(c).
(c) Upon receipt of a Right Certificate representing exercisable Rights
(with the form of election to purchase duly executed), accompanied by
payment (by certified check, cashier's check, or money order payable
to the order of the Company) of the Purchase Price for the shares to
be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof, the Rights Agent shall thereupon
promptly
(i) (A) requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be
purchased, and the Company hereby
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<PAGE> 11
irrevocably authorizes its transfer agent to comply with all
such requests, or
(B) requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a
Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the
depositary agent to comply with such request; and
(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; and
(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) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall
be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
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<PAGE> 12
SECTION 9. AVAILABILITY OF PREFERRED SHARES.
The Company covenants and agrees that it shall cause to be reserved and kept
available out of its authorized and unissued Preferred Shares, the number of
Preferred Shares that shall be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 hereof.
The Company covenants and agrees that it shall take all such actions as may be
necessary to ensure that all Preferred Shares delivered upon exercise of the
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
The Company covenants and agrees that it shall pay when due and payable any and
all federal and state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable satisfaction that
no such tax is due.
SECTION 10. PREFERRED SHARES RECORD DATE.
Each person in whose name any certificate for Preferred Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares transfer
books of the Company are open.
Prior to the issuance of Preferred Shares upon the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
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<PAGE> 13
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS.
The Purchase Price, the number of Preferred Shares covered by each Right, and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement
(A) declare a dividend on the Preferred Shares payable in
Preferred Shares,
(B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares, or
(D) issue any shares of its capital stock in a reclassification
of the Preferred Shares (including any such reclassification
in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Preferred Shares transfer books of the Company
were open, 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.
If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall
be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common
Shares of the Company as shall equal the result obtained by
multiplying
(A) the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is
then exercisable and dividing that product by
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<PAGE> 14
(B) 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section
11(d) hereof) on the date of the occurrence of such event.
In the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take
any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.
From and after the occurrence of such event, any Rights that are
or were acquired or beneficially owned by any Acquiring Person
(or any Associate or Affiliate thereof, or nominee of any of
them) shall be void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be
issued pursuant to Section 3 hereof or otherwise that represents
Rights beneficially owned by an Acquiring Person whose Rights
would be void pursuant to the preceding sentence (or any
Associate or Affiliate thereof, or nominee of any of them); no
Right Certificate shall be issued at any time upon the transfer
of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence (or any Associate or Affiliate
thereof or any nominee of any of them); and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence (or
any Associate or Affiliate thereof, or nominee of any of them)
shall be canceled. In addition, any Right Certificate issued
pursuant to Section 3 hereof that represents Rights beneficially
owned by an Acquiring Person (or any Associate or Affiliate
thereof, or nominee of any of them) and any Right Certificate
issued at any time upon the transfer of any Rights to an
Acquiring Person (or any Associate or Affiliate thereof, or
nominee of any of them) and any Right Certificate issued pursuant
to Sections 6, 7(d), 11, or 22 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred
to in this sentence, shall contain the following legend:
"The Rights represented by this Right Certificate were
issued to a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such
terms are described in the Rights Agreement) or a Nominee of
one of them. This Right Certificate and the Rights
represented hereby may become void in the circumstances
specified in the Rights Agreement."
(iii) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued
to permit the exercise in full of the Rights in accordance
with the foregoing Section 11(a)(ii), the Company shall take
all such actions as may be necessary to authorize additional
Common Shares for issuance upon exercise of the Rights. In
the event the Company, after good faith effort, shall be
unable to take all such actions as may be necessary to
authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Preferred
Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such
number or fraction is equal to the current per share market
price of one
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<PAGE> 15
Common Share as of the date of issuance of such Preferred Shares
or fraction thereof.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Preferred Shares (or
shares having the same rights, privileges and preferences as the
Preferred Shares ("Equivalent Preferred Shares")) or securities
convertible into Preferred Shares or Equivalent Preferred Shares at a
price per share (or having a conversion price per share, if a security
convertible into Preferred Shares or Equivalent Preferred Shares) less
than the then current per share market price of the Preferred Shares
on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding
on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares
and/or Equivalent Preferred Shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon the 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 shall be binding on the
Rights Agent and holders of the Rights. Preferred Shares owned by or
held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date
is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (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 Shares) or
subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of
the Preferred Shares on such record date, less the fair market value
(as determined in good faith
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<PAGE> 16
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and holders of the Rights) of the portion
of the assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one Preferred Share
and the denominator of which shall be such current per share market
price of the Preferred Shares; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of
the Company to be issued upon the 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) 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 immediately prior to such
date; provided, however, that in the event that the current per
share market price of the Security is determined during a period
following the announcement by the issuer of such Security of a
dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or any
subdivision, combination or reclassification of such Security,
and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall
be appropriately adjusted to reflect the current market price per
share equivalent of such Security.
The closing price for each day shall be
(A) 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,
(B) 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,
(C) 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 NASDAQ
or such other system then in use, or,
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<PAGE> 17
(D) if 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.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined
in accordance with the method set forth in Section 11(d)(i). If
the Preferred Shares are not publicly traded, the "current per
share market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by one
thousand. If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as determined
in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent.
(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 one-millionth of a Preferred Share or one
ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(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 Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares
contained in Sections 11(a) through (c), inclusive, and the provisions
of Sections 7, 9, 10 and 13 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-thousandths of a Preferred Share 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
14
<PAGE> 18
Purchase Price, that number of one one-thousandths of a Preferred
Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by
(i) multiplying the number of one one-thousandths of a share covered
by a Right immediately prior to this adjustment by 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 Preferred Share
purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-thousandths of a Preferred Share
for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the
public announcement.
If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the
number of one one-thousandths of a Preferred Share 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 one one-thousandth of the then par value, if any,
of the Preferred
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<PAGE> 19
Shares issuable upon exercise of the Rights, the Company shall take
any corporate actions which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence
of such event the issuing to the holder of any Right exercised after
such record date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise over
and above the Preferred Shares and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event requiring such
adjustment.
(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 Shares, issuance wholly for cash of any
Preferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends
on Preferred Shares payable in Preferred Shares, or issuance of
rights, options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Shares shall
not be taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in
Common Shares or
(ii) effect a subdivision, combination or consolidation of the Common
Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of
Common Shares,
then in any such case
(A) the number of one one-thousandths of a Preferred Share
purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one
one-thousandths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator
of which is the number of Common Shares outstanding
immediately before such event and the denominator of which
is the number of Common Shares outstanding immediately after
such event, and
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(B) each Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to
such event had issued with respect to it.
The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected. If an event
occurs which would require an adjustment under Section 11(a)(ii) and
this Section 11(n), the adjustments provided for in this Section 11(n)
shall be in addition and prior to any adjustment required pursuant to
Section 11(a)(ii).
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 accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof.
The Rights Agent shall be fully protected in relying on the terms of any such
certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
In the event, directly or indirectly, at any time after a Person has become an
Acquiring Person,
(a) the Company shall merge with and into any other Person,
(b) any Person shall merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and,
in connection with such merger, all or part of the Common Shares shall
be changed into or exchanged for stock or other securities of any
other Person (or the Company) or cash or any other property,
(c) the Company shall be a party to a Share Exchange immediately following
which the Company is a Subsidiary of any other Person, or
(d) 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,
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then, and in each such case, proper provision shall be made so that
(i) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price
multiplied by the number of one-thousandths of a Preferred Share
for which a Right is then exercisable, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such
number of Common Shares of such other Person (including the
Company as successor thereto or as the surviving corporation) as
shall equal the result obtained by multiplying the then current
Purchase Price by the number of one-thousandths of a Preferred
Share for which a Right is then exercisable and dividing that
product by 50% of the then current per share market price of the
Common Shares of such other Person (determined pursuant to
Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to
this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
issuer; and
(iv) such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance
with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common
Shares thereafter deliverable upon the exercise of the Rights.
The Company shall not consummate any such merger, Share Exchange, sale or
transfer unless prior thereto the Company and such issuer shall have executed
and delivered to the Rights Agent a supplemental agreement so providing.
The Company shall not enter into any transaction of the kind referred to in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights.
The provisions of this Section 13 shall similarly apply to successive mergers,
Share Exchanges, sales, or other transfers.
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<PAGE> 22
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid
to the registered holders of the Right Certificates with regard
to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale
price, 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
Shares (other than fractions which are integral multiples of one one-
thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares
(other than fractions which are integral multiples of one
one-thousandth of a Preferred Share). Fractions of Preferred Shares
in integral multiples of one one-thousandth of a Preferred Share may,
at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided, that such agreement shall provide
that the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are
not integral multiples of one one-thousandth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of one
Preferred Share. For the purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of such exercise.
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(c) The holder of a Right, by the acceptance thereof, expressly
waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as
provided above).
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares). Any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Shares), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall 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 shall be transferable only
in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by
a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date,
the Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificate or the
Common Shares certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
(d) any restriction on transfer deemed to be imposed by this Agreement is
valid and enforceable against the holder and any transferee of the
holder in accordance with Section 13.1-649 of the Virginia Stock
Corporation Act.
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<PAGE> 24
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
The Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of such liability.
The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust powers of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case, at the time such successor Rights Agent shall succeed to the
agency created by this
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<PAGE> 25
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.
In case, at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case, at that time any
of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases, such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever, in the performance of its duties under this Agreement, the
Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Executive Vice President or Vice
President, the Treasurer or the Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
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<PAGE> 26
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach
by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be 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, or 24 hereof, or the
ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change
or adjustment is required); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any Preferred Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Preferred
Shares shall, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it shall perform, execute, acknowledge and
deliver (or cause to be performed, executed, acknowledged and
delivered) all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out
or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Executive Vice President or Vice
President, the Secretary, Assistant Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered by it in good faith in accordance with instructions
of any such officer or for any delay in acting while waiting for those
instructions.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company, or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with
or lend money to the Company, or otherwise act fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(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.
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(j) The Rights Agent shall only be required to perform the duties
expressly set forth herein and no implied duties or obligations shall
be read into this Agreement against the Rights Agent.
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 Shares or Preferred Shares
by registered or certified mail, and to the holders of the Right Certificates
by first-class mail.
The Company may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of New York), in good standing, having an office in the State of New
York, which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $20 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. The predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Shares or Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
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SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change 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.
SECTION 23. REDEMPTION.
(a) The Board may, at its option, at any time prior to such time as any
Person becomes an Acquiring Person, redeem all but not less than all
of the then outstanding Rights at the Redemption Price; provided,
however, that in connection with a transaction to be accounted for as
a pooling of interests, the Board shall have the option to pay the
Redemption Price in securities or other property with an equivalent
value per Right. The redemption of the Rights by the Board may be
made effective at such time on such basis and with such conditions as
the Board in its sole discretion may establish.
(b) Immediately upon the action of the Board ordering the redemption of
the Rights pursuant to Section 23(a), and without any further action
and without any notice, the right to exercise the Rights shall
terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price. The Company shall promptly give
public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action of
the Board ordering the redemption of the Rights, the Company shall
mail a notice of redemption to all the holders of the then outstanding
Rights at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which the payment of
the Redemption Price shall be made. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
SECTION 24. EXCHANGE.
(a) The Board may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become
void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board
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<PAGE> 29
shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any
entity holding Common Shares for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board ordering the exchange of any
Rights pursuant to Section 24(a), and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange shall state
the method by which the exchange of the Common Shares for Rights shall
be effected and, in the event of any partial exchange, the number of
Rights which shall be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange
of Rights as contemplated in accordance with this Section 24, the
Company shall take all such actions as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights. In
the event the Company shall, after good faith effort, be unable to
take all such actions as may be necessary to authorize such additional
Common Shares, the Company shall substitute, for each Common Share
that would otherwise be issuable upon exchange of a Right, a number of
Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or
fraction is equal to the current per share market price of one Common
Share as of the date of issuance of such Preferred Shares or fraction
thereof.
(d) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole
Common Share. For the purposes of this Section 24(d), the current
market value of a whole Common Share shall be the closing price of a
Common Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
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SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose
(i) to pay any dividend payable in stock of any class to the holders
of its Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly
cash dividend),
(ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities,
rights or options,
(iii) to effect any reclassification of its Preferred Shares
(other than a reclassification involving only the
subdivision of outstanding Preferred Shares),
(iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to, any
other Person,
(v) to effect the liquidation, dissolution or winding up of the
Company, or
(vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to
take place and the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any action
covered by Section 25(a)(i) or (ii) above at least 10 days prior to
the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common
Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case an event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
27
<PAGE> 31
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:
Dana Corporation
P.O. Box 1000
Toledo, Ohio 43697
Attention: 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:
Chemical Mellon Shareholder Services, L.L.C.
450 West 33rd Street
New York, New York 10001
Attention: Laura Picone
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.
The Company may from time to time supplement or amend this Agreement without
the approval of any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company may deem
necessary or desirable, any such supplement or amendment to be evidenced by a
writing signed by the Company and the Rights Agent; provided, however, that
from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect the
interests of the holders of Rights.
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.
28
<PAGE> 32
SECTION 29. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Shares) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Shares).
SECTION 30. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
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 Commonwealth of Virginia and for all
purposes shall be governed by and construed in accordance with the laws thereof
applicable to contracts to be made and performed entirely within Virginia.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
DANA CORPORATION CHEMICAL MELLON
SHAREHOLDER SERVICES, L.L.C.
By: Martin J. Strobel By: Laura R. Picone
----------------------- --------------------------
Name: Martin J. Strobel Name: Laura R. Picone
Title: Vice President Title: Assistant Vice President
29
<PAGE> 33
Exhibit A
---------
Form of Right Certificate - Front Side
--------------------------------------
Certificate No. R-_________ _____________ Rights
NOT EXERCISABLE AFTER JULY 25, 2006, OR EARLIER REDEMPTION OR EXCHANGE. 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, RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DESCRIBED IN THE RIGHTS AGREEMENT)
OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (OR A
NOMINEE OF ONE OF THEM). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS
AGREEMENT.](1)
Right Certificate
DANA 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 April 25, 1996 (the "Rights Agreement"),
between Dana Corporation, a Virginia corporation (the "Company"), and Chemical
Mellon Shareholder Services, L.L.C. (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 July 25, 2006,
at the principal office of the Rights Agent, or at the office of its successor
as Rights Agent, one one-thousandth of a fully paid non-assessable share
(except as may be provided in the Virginia Stock Corporation Act) of Series A
Junior Participating Preferred Stock, without par value (the "Preferred
Shares"), of the Company, at a purchase price of $110 per one one-thousandth of
a Preferred Share (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) and the Purchase Price set forth above are the number and Purchase
Price as of July 25, 1996, based on the Preferred Shares as constituted at such
date. As provided in the Rights Agreement, the Purchase Price and the number
of one one- thousandths of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and reference is
hereby made to the Rights Agreement
________________________
1 The portion of the legend in brackets shall be inserted only
if applicable.
30
<PAGE> 34
for a full description of the rights, limitations of rights, obligations,
duties and immunities of the Rights Agent, the Company, and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned offices of
the Rights Agent.
This Right Certificate, upon surrender at the principal office of the Rights
Agent, may be exchanged for another Right Certificate of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate. 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 the
Company's Common Stock, par value $1 per share or Preferred Shares.
No fractional Preferred Shares shall 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 Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment shall be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
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 has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company, dated as
of July 25, 1996.
ATTEST: DANA CORPORATION
By___________________________ By___________________________
Secretary
Countersigned (for purposes of authentication):
By___________________________
Authorized Signature
31
<PAGE> 35
Form of Right Certificate - Reverse Side
----------------------------------------
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 below 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.
FORM OF ASSIGNMENT
(To be executed by the registered holder to transfer the Right Certificate.)
FOR VALUE RECEIVED, ______________________________________, hereby sells,
assigns and transfers unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Signature: __________________________________________ Dated: ______________
Signature Guaranteed:
(Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate hereof (as defined in the Rights Agreement).
Signature: ______________________________________
32
<PAGE> 36
FORM OF ELECTION TO PURCHASE
(To be executed by registered holder to exercise Rights
represented by the Right Certificate.)
To: DANA CORPORATION
The undersigned hereby irrevocably elects to exercise _________________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
Social security or taxpayer identification number: ___________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
Social security or taxpayer identification number: ____________________________
Signature: __________________________________________ Dated: ______________
Signature Guaranteed:
(Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate hereof (as defined in the Rights Agreement).
Signature: ______________________________________
33
<PAGE> 37
Exhibit B
---------
Summary of Rights to Purchase Preferred Shares
----------------------------------------------
On April 15, 1996, the Board of Directors (the "Board") of Dana Corporation
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $1 per share
(the "Common Shares") of the Company. The dividend is payable on July 25,
1996, to the shareholders of record on that date.
Each Right entitles the holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, no par value (the
"Preferred Shares") of the Company at a price of $110 per one one-thousandth of
a Preferred Share (the "Purchase Price").
A complete description of the Rights is set forth in the Rights Agreement (the
"Rights Agreement") between the Company and Chemical Mellon Shareholder
Services, L.L.C., the Rights Agent, and this Summary is qualified in its
entirety by reference to the Rights Agreement. A copy of the Rights Agreement
was filed with the Securities and Exchange Commission as an exhibit to a
Registration Statement on Form 8-A dated May 1, 1996, and copies are
available from the Company free of charge on request.
The Rights Agreement provides that the Rights will not be exercisable until the
Distribution Date, which will be the earlier 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
Company's outstanding Common Shares, or (ii) 10 business days (or such later
date as is established by the Board before any person or group becomes an
Acquiring Person) following the commencement of, or the announcement of an
intention to make, a tender offer or exchange offer which, if consummated,
would result in the beneficial ownership by a person or group of 15% or more of
the Company's outstanding Common Shares.
Until the Distribution Date (or the earlier redemption or expiration of the
Rights), the Rights will be transferred with, and only with, the Common Shares.
For Common Shares outstanding as of July 25, 1996, the Rights will be evidenced
by the certificates for such Common Shares with a copy of this Summary of
Rights attached. For Common Shares issued thereafter, the Rights will be
evidenced by a notation on the certificate incorporating the Rights Agreement
by reference. In either case, until the Distribution Date (or the earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificate for Common Shares, even without the notation or the attached copy
of this Summary, will constitute the transfer of the Rights associated with the
Common Shares represented by the certificate. As soon as practicable after the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date, and thereafter such separate
Right Certificates alone will evidence the Rights.
If any person or group of affiliated or associated persons becomes an Acquiring
Person, each holder of a Right (other than the Acquiring Person, whose Rights
will have become void) will be entitled, upon the exercise of the Right, to
receive that number of Common Shares having a market value of two times the
exercise price of the Right. In addition, if,
34
<PAGE> 38
after a person or group has become an Acquiring Person, the Company is acquired
in a merger or other business combination transaction or if 50% or more of its
consolidated assets or earning power are sold, each holder of a Right will be
entitled to receive, upon the exercise of the Right at its then current
exercise price, that number of shares of common stock of the acquiring company
having a market value at the time of such event of two times the exercise price
of the Right.
At any time before an Acquiring Person acquires beneficial ownership of 15% or
more of the Company's outstanding Common Shares, the Board may redeem the
Rights in whole, but not in part, at a price of $.01 per Right, on such terms
as the Board may establish in its sole discretion. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the holders will be entitled only to receive the foregoing redemption price.
At any time after any person or group becomes an Acquiring Person, but before
the Acquiring Person acquires 50% or more of the Company's outstanding Common
Shares, the Board may exchange the Rights (other than those held by the
Acquiring Person, which will have become void), in whole or part, at an
exchange ratio of one Common Share or one one-thousandth of a Preferred Share
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges) per Right.
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share issuable upon exercise of each Right are subject to adjustment
if, prior to the Distribution Date, there is a stock split of the Common
Shares; a stock dividend on the Common Shares payable in Common Shares; or a
subdivision, consolidation or combination of the Common Shares.
The Purchase Price and the number of Preferred Shares or other securities or
property issuable upon exercise of the Rights are also subject to adjustment to
prevent dilution: in the event of a stock dividend or of a subdivision,
combination or reclassification of the Preferred Shares; upon the grant to the
Preferred Share holders of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price less than the then-current market price or
securities convertible into Preferred Shares with a conversion price less than
the then-current market price for the Preferred Shares; or upon the
distribution to the Preferred Share holders of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants other than those referred to above. 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.
The holder of a Right, as such, will have no rights as a shareholder of the
Company (including, without limitation, the right to vote or to receive
dividends) until the Right is exercised. The terms of the Rights may be
amended by the Board without the consent of the holders of the Rights, provided
that no amendment adversely affects the interests of the holders.
If not exercised, redeemed or exchanged sooner, the Rights will expire on July
25, 2006, unless such expiration date is extended.
35
<PAGE> 39
The Company's Articles of Incorporation set forth the terms of the Preferred
Shares. If issued, the Preferred Shares will be entitled to a cumulative
preferential quarterly dividend per share equal to the greater of $10 or 100
times the dividend declared on the Company's Common Shares. The Preferred
Shares will be redeemable in whole at the Company's option at a cash price per
share of the greater of $100 or 100 times the Current Market Price (as defined
in the Articles) of the Common Shares. In the event of liquidation, the
holders of the Preferred Shares will be entitled to receive an amount equal to
accrued and unpaid dividends, plus an amount per share equal to the greater of
$100 or 100 times the payment made per share to holders of Common Shares. Each
Preferred Share will be entitled to 100 votes, voting together with the holders
of the Common Shares on all matters submitted to the vote of shareholders. In
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, the holder of each Preferred Share will be entitled to
receive 100 times the amount and type of consideration paid per Common Share.
The rights of the holders of Preferred Shares as to dividends and liquidations,
their voting rights, and their rights in the event of mergers and
consolidations, are protected by customary anti-dilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and voting
rights, the value of the one one-thousandth of a Preferred Share purchasable
upon the exercise of each Right should approximate the value of one Common
Share.
No fractional Preferred Shares will be issued (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of exercise.
36
<PAGE> 1
Exhibit 3
---------
DANA RENEWS SHAREHOLDER RIGHTS PLAN
TOLEDO, OHIO, April 15, 1996 -- The Board of Directors of Dana Corporation
today renewed the shareholder rights plan by declaring a dividend of one
Preferred Share Purchase Right on each outstanding share of Dana's common
stock, to be distributed to shareholders of record as of the close of business
on July 25, 1996. The Rights will replace the Company's currently outstanding
Preferred Share Purchase Rights, which expire on that date.
Dana Chairman Southwood J. Morcott said, "The Board's action is intended to
continue the protection afforded to Dana's shareholders under the Company's
current Rights Agreement, which was adopted in 1986 and expires this year. The
Rights are designed to assure that all of Dana's shareholders would receive
fair and equal treatment in the event of a proposed takeover of the Company,
and to guard against partial tender offers, squeeze-outs, open market
accumulations, and other abusive tactics to gain control of the Company without
paying the shareholders a control premium. The Rights will not prevent a
takeover, but they should encourage anyone seeking to acquire the Company to
negotiate with the Board before commencing an offer."
The Rights will be triggered and exercisable only if a person or group acquires
15 percent or more of Dana's common stock or announces a tender offer which,
if completed, would result in that person or group owning 15 percent or more of
Dana's common stock.
Each Right will entitle its holder to buy 1/1000th of a share of the Company's
Series A Junior Participating Preferred Stock, no par value, at an exercise
price of $110.
If triggered, the Rights will entitle the holders (except the acquiring person
or group) to buy that number of shares of Dana common stock having a market
value of twice the exercise price of the Rights at the time of the triggering
acquisition. In addition, if another company were to merge or otherwise
combine with Dana or purchase 50 percent or more of Dana's assets or earning
power, then the outstanding Rights would entitle the holders (except the
acquiring company) to buy that number of shares of the acquiring company's
common stock having a market value of twice the exercise price of the Rights at
the time of the triggering event.
At any time after a person or group acquires 15 percent or more, but less than
50 percent, of Dana's common stock, Dana's Board may, at its discretion,
exchange each outstanding Right (except those owned by the acquiring person or
group) for either one share of Dana's common stock or 1/1000th of a share of
Dana's Series A Junior Participating Preferred Stock.
The Board may redeem the Rights at the price of $.01 each at any time before
any person or group acquires 15 percent of Dana's common stock.
The Rights will expire on July 25, 2006, if not exercised, exchanged or
redeemed before then.
<PAGE> 2
Dana Corporation is a global leader in the engineering, manufacturing and
distribution of products and systems for the vehicular, industrial and mobile
off-highway markets. Founded in 1904 and based in Toledo, Ohio, Dana operates
facilities in 29 countries with 46,000 people. Its 1995 sales were $7.6
billion. Named in 1995 by Financial World magazine as one of the "Best 100
Growth Companies," Dana is noted for its style of management and its commitment
to innovation. It has 37 product research and development centers worldwide.
Dana also owns Dana Credit Corporation, a leading provider of lease financing
services. The Internet address for Dana's home page is http://www.dana.com.
<PAGE> 1
Exhibit 4
---------
April 15, 1996
To Dana's Shareholders:
I am happy to report that Dana had another good solid performance in
the first quarter of 1996, with sales of $2 billion and net income of
$79 million, both up from the same period in 1995. I will be sending
you a letter shortly with more detailed first quarter information.
The purpose of this letter is to tell you that Dana's Board today
approved a new Rights Plan which will continue the takeover protection
that has been provided since 1986 under the Company's current Rights
Plan. The current Plan will expire in July. The purpose of the new
Plan, like the present one, is to guard against abusive tactics in the
event of an unsolicited attempt by a third party to gain control of the
Company, and to assure that, in the event of a proposed takeover, all of
the Company's shareholders will be treated fairly and equally. The
Rights Plan cannot -- and is not intended to -- prevent a takeover of
the Company, but is meant to deter attempts to acquire the Company in a
manner or on terms which the Board believes are contrary to the
shareholders' best interests.
The Board considers the Rights Plan to be the best available means of
protecting your investment in Dana while not foreclosing a fair
acquisition bid. Over 1,700 companies -- including approximately half
of the Business Week 1000 and Fortune 500 companies and two-thirds of
the Fortune 200 companies -- have comparable plans to protect their
shareholders.
To implement the new Rights Plan, the Board has declared a dividend
consisting of one Preferred Share Purchase Right for each share of Dana
common stock outstanding at the close of business on July 25, 1996. The
Rights will attach automatically to those common shares and no
certificates for the Rights will be issued at that time. Instead,
shareholders of record on that date will receive a detailed "Summary of
Rights to Purchase Preferred Shares," which will be evidence of the
Rights that have been "distributed" in connection with their shares.
The enclosed "New Rights Summary" explains in brief how the new
Rights will work. The features of the new Plan are similar to those of
the current Plan, except that the threshold which triggers the Rights is
lower in the new Plan.
<PAGE> 2
As you read the enclosure, please remember that:
* YOU DO NOT NEED TO TAKE ANY ACTION AS A RESULT OF THIS LETTER
OR THIS ANNOUNCEMENT.
* YOU DO NOT HAVE TO "SIGN UP" TO BENEFIT FROM THE NEW PLAN.
Shareholders of record at the close of business on July 25,
1996, will automatically receive one Right for each share of
Dana common stock they own at that time.
* YOU SHOULD NOT SEND US THE STOCK CERTIFICATES FOR YOUR CURRENT
DANA SHARES. The stock certificates for those shares of Dana
common stock that are outstanding on July 25, 1996, will remain
valid and will not be reissued.
* YOUR RIGHTS WILL NOT BE EXERCISABLE AND WILL NOT ENTITLE YOU TO
PURCHASE ANY DANA OR OTHER STOCK UNLESS AND UNTIL A TAKEOVER SITUATION
ARISES. In that event, the Rights holders will be sent separate Rights
Certificates which represent their Rights and they will then be able to
exercise the Rights as described in the enclosed "New Rights Summary."
As Chairman, I want to thank you, Dana's shareholders, for your
continued support and assure you that the Board has approved the new
Rights Plan after careful deliberation and with your best interests in
mind. The issuance of the Rights will not reduce Dana's financial
strength, interfere with our business plans, dilute our stock, or affect
our reported earnings per share. In declaring the Rights dividend, the
Board has expressed its confidence in the future of the Company and its
determination that you be given every opportunity to participate fully
in that future.
Sincerely,
/s/ Southwood J. Morcott
Southwood J. Morcott
Enclosure
<PAGE> 3
DANA CORPORATION
NEW RIGHTS SUMMARY
WHAT ARE THE RIGHTS?
The Rights are a dividend which will automatically attach to each share of Dana
common stock which is outstanding on July 25, 1996, or issued thereafter.
Shareholders of record on July 25, 1996, will receive a detailed "Summary of
Rights to Purchase Preferred Shares," which will be evidence of the Rights that
have been distributed in connection with their shares. Stock certificates for
shares issued after that date will bear a legend evidencing the attached
Rights. No certificates for the Rights will be issued until such time as they
become exercisable.
Each Right will entitle the holder (when and if the Right becomes exercisable)
to purchase one 1/1000th of a share of Dana Series A Junior Participating
Preferred Stock, no par value (the "Participating Preferred Stock") for $110
(the "Purchase Price"). Initially and until they become exercisable, the
Rights will trade automatically with Dana's common stock. The Rights will have
no voting power. They will expire on July 25, 2006, if not exercised, redeemed
or exchanged before then.
WHEN WILL THE RIGHTS BE EXERCISABLE?
The Rights will become exercisable only in two circumstances:
* 10 days after any person or group (an "Acquiror") acquires 15% or
more of Dana's common stock, or
* 10 business days after an Acquiror announces an offer which, if
completed, would result in its owning 15% or more of Dana's common
stock.
In either event, separate "Rights Certificates" representing the Rights will be
sent to the holders and the holders (other than the Acquiror) will then be able
to exercise their Rights. At that time, the Rights will also begin to trade
independently from Dana's common stock, at prices the market establishes.
WHAT ALTERNATIVES WILL THE HOLDERS HAVE IF THE RIGHTS BECOME EXERCISABLE?
If the Rights become exercisable, instead of purchasing one 1/1000th of a share
of Participating Preferred Stock from Dana, the holder of each Right (other
than the Acquiror) may elect to purchase from Dana (at the Purchase Price of
$110) that number of shares of Dana common stock that have a market value of
twice the Purchase Price. For example, if Dana common stock were trading at
$44 per share, the holder could buy 5 shares (worth $220) for $110 -- in
effect, a 50% discount on Dana's stock.
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If Dana is merged or otherwise combined with the Acquiror, the holder of each
Right which has not been used previously to purchase Participating Preferred
Stock or Dana common stock (other than the Acquiror) may elect to purchase from
the Acquiror (at the Purchase Price of $110) that number of shares of the
Acquiror's common stock that have a market value of twice the Purchase Price of
the Right -- in effect, a 50% discount on the Acquiror's stock.
These alternatives are intended to deter an Acquiror from proceeding with a
takeover bid in a manner or on terms which the Board determines are not in the
best interests of Dana's shareholders.
WHAT ALTERNATIVES WILL DANA'S BOARD HAVE IF THE RIGHTS BECOME EXERCISABLE?
After the Rights have been triggered by an Acquiror's acquisition of 15% or
more of Dana's common stock -- but before the Acquiror has acquired a 50% stake
- -- the Board may, at its discretion, exchange each Right (except those owned by
the Acquiror) for either one share of Dana common stock or one 1/1000th of a
share of the Series A Junior Participating Preferred Stock. This is intended
to secure for the holders the benefits that they would receive upon exercising
the Rights, without requiring the holders to take the time and effort to do so.
CAN THE RIGHTS BE CANCELED?
The Rights cannot be canceled. However, they may be amended or redeemed by
Dana's Board for 1 cent per Right at any time before an Acquiror accumulates
15% or more of Dana's common stock. This is intended to assure that the Rights
do not interfere with a negotiated merger or business combination which the
Board determines is in the best interests of the shareholders.
WHAT ARE THE TAX CONSEQUENCES?
The distribution of the Rights will not be taxable to the holders or to Dana.
However, the holders may recognize taxable income if the Rights become
exercisable, are redeemed, or are exchanged. It is recommended that the
holders consult their tax advisors in any of those events.
HOW CAN I GET MORE INFORMATION?
If you have any questions about the new Rights Plan, please write or call Dana
Investor Relations, P.O. Box 1000, Toledo, Ohio 43697, or telephone
1-800-537-8823 (in Ohio, 1-800-472-8810).
Date: April 15, 1996
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